Note 11     WARRANTS

IPO Warrants

In connection with the Company’s initial public offering, the Company issued warrants to purchase shares of its Common Stock (the “IPO Warrants”). The IPO Warrants contain exercise price reset provisions whereby the exercise price may be adjusted based on the VWAP of the Common Stock following issuance. In addition, the Company may, subject to holder consent, reduce the exercise price at the discretion of the Board of Directors. The IPO Warrants also provide the Company with redemption rights at a price equal to a multiple of the exercise price upon the satisfaction of certain market-based conditions. Due to the presence of exercise price reset features, discretionary repricing provisions and non-nominal redemption terms, the IPO Warrants do not meet the criteria for equity classification. Accordingly, the IPO Warrants are classified as warrant liabilities and are recorded at fair value at each reporting date, with changes in fair value recognized in earnings.

The IPO Warrants are classified as Level 3 within the fair value hierarchy because they are not traded in an active market and their valuation relies on significant unobservable inputs. The fair value of the IPO Warrants is estimated using the Black-Scholes option pricing model, incorporating assumptions regarding the fair value of the Company’s common stock, expected term, expected volatility, risk-free interest rate, dividend yield, and adjustments for exercise price reset and redemption features. The expected term equals the remaining contractual term, as the IPO Warrants are fully vested and exercisable. Expected volatility is based on the historical volatility of a group of comparable publicly traded companies over a period consistent with the expected term. The risk-free interest rate is based on U.S. Treasury yields with maturities consistent with the expected term. The dividend yield is assumed to be zero, as the Company has not historically paid dividends and does not expect to pay dividends for the foreseeable future. Changes in key assumptions could materially affect the estimated fair value of the IPO Warrants.

The following is a reconciliation of the beginning and ending balances of warrants liability measured at fair value on a recurring basis using Level 3 inputs:

All outstanding warrants to purchase Common Stock, including the number of shares issuable upon exercise and the applicable exercise price, have been proportionately adjusted to reflect the Reverse Stock Split, in accordance with the anti-dilution provisions of the applicable warrant agreements. As of June 30, 2026, on a post-Reverse Stock Split basis, warrants to purchase approximately 66,028 shares of Common Stock were outstanding, at an adjusted exercise price of $57.9 per share. The following is a summary of the IPO warrant activity: