Note 3 — Fair Value Measurement

Assets and liabilities recorded at fair value on a recurring basis in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level 1 —  Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 —  Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level 3 — Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

The Company measures certain financial instruments at fair value using valuation techniques that require the use of observable and unobservable inputs and assumptions, including, as applicable, risk-free interest rates, expected terms, expected volatility, credit risk, market yields, conversion or exercise prices, the fair value of the Company’s common stock, and other instrument-specific terms and market inputs. The risk-free interest rate for each applicable financial instrument is based on the U.S. Treasury yield curve in effect as of the valuation date for a term commensurate with the expected term, contractual term, or estimated settlement period of the instrument, as applicable. Expected volatility, when applicable, may differ among financial instruments due to differences in expected terms, contractual maturities, settlement provisions, conversion or exercise features, valuation methodologies, market inputs, and the historical periods used to estimate volatility.

As of June 30, 2026 and December 31, 2025, the Company’s financial assets and liabilities measured at fair value on a recurring basis, were as follows (in thousands):

Warrant Liabilities

The key inputs into the Monte Carlo simulation model for the Private Placement and the Representative’s warrant liabilities, as affected by the Reverse Stock Splits, were as follows at June 30, 2026 and December 31, 2025:

Each Private Placement and the Representative’s warrant entitles the registered holder to purchase 1/7,500 of one share of our common stock at a price of $86,250.00 per whole share, as affected by the Reverse Stock Splits. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of common stock. This means only a number of warrants that in the aggregate equal a whole number of shares may be exercised at a given time by a warrant holder. No fractional warrants will be issued and only whole warrants will trade.

The following table provides a summary of the changes in the fair value of the Company’s Level 3 warrant liabilities that are measured at fair value on a recurring basis for the three and six months ended June 30, 2026 (in thousands):

Related party convertible notes payable

The Tasly Convertible Note was valued using a Probability Weighted Expected Return Model to fair value the convertible note. The intrinsic conversion value as of June 30, 2026 and December 31, 2025 was $0 for the Tasly Convertible Note. As of June 30, 2026 and December 31, 2025, the Tasly Convertible Note has matured and is payable at the principal amounts plus accrued interest. Therefore, the fair value of the note is the face amount of the debt, and as of June 30, 2026 and December 31, 2025, accrued interest was added to the liability balance.

On March 20, 2026, the Convertible Promissory Note - Related Party was amended which extended the maturity date through December 31, 2026 - See Note 5 for further information. As of June 30, 2026, the Convertible Promissory Note - Related Party was valued using a Monte Carlo simulation model due to the amendments during the three months ended June 30, 2026.

As of December 31, 2025, the Convertible Promissory Note - Related Party had matured, remained outstanding and the intrinsic value was $0. Because the remaining contractual term was zero and the conversion feature had no intrinsic value, the fair value of the Convertible Promissory Note - Related Party as of December 31, 2025 was determined based on its outstanding principal amount and accrued interest. Accordingly, option-pricing assumptions, including expected volatility and the risk-free interest rate, were not applicable as of December 31, 2025.

The key inputs into the Monte Carlo simulation model for the Convertible Promissory Note - Related Party were as follows at June 30, 2026, as affected by the July and August Reverse Stock Splits:

Collectively, the Tasly Convertible Note and the Convertible Promissory Note - Related Party are referred to as “Related Party Convertible Notes Payable”. The following table provides a summary of the changes in the fair value of the Company’s Level 3 Related Party Convertible Notes Payable for the three and six months ended June 30, 2026 and 2025 (in thousands):

Convertible Loans Payable

The Company uses a Monte Carlo simulation model to value the convertible loans payable, which represents the issued Ascent PIPE Notes. The convertible loans payable were classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs. Inherent in pricing models are assumptions related to expected share-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the convertible loans payable. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the loans. The expected life of the loans are assumed to be equivalent to their remaining contractual term.

The key inputs into the Monte Carlo simulation model for the convertible loans payable were as follows at June 30, 2026 and December 31, 2025, as affected by the Reverse Stock Splits:

The following table provides a summary of the changes in the fair value of the Company’s Level 3 convertible loans payable for the three and six months ended June 30, 2026 (in thousands):

The fair value of the Company’s convertible loans payable settled through conversion was determined by multiplying the closing price of the Company’s common stock on the applicable conversion date by the number of shares of common stock issued upon settlement.

Loss on change in the fair value of convertible notes on the condensed consolidated statements of operations comprise of the change in fair value of the related party convertible notes payable and convertible loans payable and its related accrued interest on the convertible notes. As of June 30, 2026, the convertible loans payable is due within 12 months of the balance sheet date and is therefore recorded as a current liability within convertible senior notes and loans payable at fair value on the condensed consolidated balance sheets.

Digital Asset

On March 11, 2026, the Company’s management made the determination to terminate the Company’s Bitcoin treasury reserve strategy in light of current market conditions and the Company’s evaluation of its capital allocation priorities. During the six months ended June 30, 2026, the Company sold 16.51 Bitcoins for an aggregate amount of $1.2 million, resulting in realized losses of $0.3 million included in the condensed consolidated statements of operations. As of June 30, 2026 and December 31, 2025, digital assets were $0 and $1.4 million, respectively.