Summary of Significant Accounting Policies (Policies) |
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| Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements (the “financial statements”) are presented in conformity with US GAAP and pursuant to the rules and regulations of the SEC.
During the periods prior to the Closing date of the Merger, the Company operated as part of G3. Consequently, stand-alone financial statements have not historically been prepared for the Company. The accompanying financial statements have been prepared from G3’s historical accounting records and are presented on a stand-alone basis as if the Company’s operations had been conducted independently from G3. Therefore, the financial statements included herein may not be indicative of the financial position, results of operations, and cash flows of the Company in the future or if the Company had been a separate, stand-alone entity during the periods presented.
The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future.
The financial statements include the Company entities. All intercompany transactions have been eliminated for consolidation purposes. |
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| Emerging Growth Company | Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
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| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. |
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| Segment Reporting | Segment Reporting
The Company has determined that the is its Chief Operating Decision Maker (the “CODM”). Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the CODM in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.
The CODM uses consolidated net (loss) as the measure of segment profit or loss. Expense information is also reviewed only at the consolidated level, as presented in the Company’s consolidated statement of operations. Research and development expense has been identified as a significant segment expense, with all other expense lines being considered part of ‘Other segment items.’ Additionally, the CODM evaluates assets on a consolidated basis. As such, the Company reports segment profit or loss, segment expenses, and segment assets on a condensed consolidated basis. |
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| Cash and cash equivalents | Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2026, cash equivalents consisted of money market funds of $26,066,209. The Company did have any cash equivalents as of December 31, 2025. |
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| Accounts Receivable, net of Allowance for Credit Losses | Accounts Receivable, net of Allowance for Credit Losses
Accounts receivables are stated at the amount the Company expects to collect. The Company recognizes an allowance for credit losses to ensure accounts receivables are not overstated due to uncollectability. Bad debt reserves are maintained as warranted for various customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings, or deterioration in such customer’s operating results or financial position. If circumstances related to a customer change, estimates of the recoverability of receivables would be further adjusted. As of September 30, 2026 and December 31, 2025, the Company determined that no allowance was required. |
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| Other Receivable | Other Receivable
During the first quarter of 2024, the Company advanced $302,500 to G3 for transaction costs incurred during the Merger. As of September 30, 2026 and December 31, 2025, the outstanding balance of other receivables amounted to $302,500. |
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| Inventory | Inventory
Inventories are stated at the lower of first-in, first-out cost or net realizable value. The Company writes-down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. The Company writes off obsolete inventories when the Company deems the value to be impaired. As of September 30, 2026 and December 31, 2025, the Company determined that write off was required. |
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| Property and Equipment, net | Property and Equipment, net
Property and equipment are recorded at cost less accumulated depreciation. Expenditures for maintenance and repairs, which do not extend the economic useful life of the related assets, are charged to operations as incurred, and expenditures, which extend the economic life, are capitalized. When assets are retired, or otherwise disposed of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized. The Company reviews long-lived assets, including property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Indicators of impairment may include significant underperformance relative to historical or projected future operating results, changes in the manner or duration of use of the asset, adverse changes in business climate, or plans for disposal or restructuring.
When an impairment indicator is identified, the Company performs a recoverability test by comparing the carrying amount of the asset group to the estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount exceeds the undiscounted cash flows, an impairment loss is recognized equal to the amount by which the carrying value exceeds the fair value of the asset group. The impairment loss is included in operating results in the period it is determined.
Based on its assessments, the Company did not incur any impairment charges for the three and nine months ended September 30, 2026 and 2025.
The Company depreciates its property and equipment for financial reporting purposes using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:
Property and equipment consisted of the following as of September 30, 2026 and December 31, 2025:
Depreciation expense of property and equipment was $47,576 and $142,729, for each of the three and nine months ended September 30, 2026 and 2025, respectively. |
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| Patents | Patents
The Company capitalizes external costs, such as filing fees and associated attorney fees, incurred to obtain issued patents. The Company’s intangible assets consist of capitalized costs for unissued patents and issued patents. Issued patents are carried at cost less accumulated amortization. Successful patent efforts are amortized over the life of the patent, and unsuccessful efforts are expensed. The issued patents are being amortized over a useful life of 20 years. Amortization of the patent costs commences upon patent issuance.
The Company assesses the carrying value of its intangible assets for impairment each year and when indicators exist that there could be an impairment. Based on its assessments, the Company did not incur any impairment charges for the three and nine months ended September 30, 2026 and 2025. Intangible assets consisted of the following as of September 30, 2026 and December 31, 2025:
Amortization expense for the patents included in the condensed consolidated statements of operations was $19,824, $59,472, $20,882 and $64,130 for the three and nine months ended September 30, 2026 and 2025, respectively. Future amortization expense for the patents over the next five years is anticipated to be approximately $105,000 per year. |
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| Offering and Issuance Costs | Offering and Issuance Costs
The Company accounts for deferred offering costs in accordance with SEC Staff Accounting Bulletin Topic 5.A and ASC 340-10-S99-1, under which costs of a proposed or actual offering of securities are deferred and charged against the gross proceeds of the offering upon completion. Costs related to an offering that is abandoned or aborted are charged to other income (expense).
On June 9, 2026, the Company withdrew its Registration Statement on Form S-1 relating to a previously proposed underwritten offering, following the expiration of the Company’s arrangement with its underwriter in April 2026. As a result, the Company charged $549,915 of previously deferred offering costs, including $89,000 of such costs incurred during the three months ended June 30, 2026, to other income (expense).
On June 7, 2026, we entered into a securities purchase agreement (the “2026 Purchase Agreement”) with a new institutional investor (the “2026 Investor”), pursuant to which we agreed to issue and sell, in a private placement (the “2026 Private Placement”), (i) 750,000 shares of Common Stock at a purchase price of $15.00 per share and (ii) pre-funded warrants to purchase up to 1,583,000 shares of Common Stock at a purchase price of $14.9999 per pre-funded warrant (the “Pre-Funded Warrants”). Offering costs incurred in connection with the 2026 Private Placement were charged against the gross proceeds as a reduction of additional paid-in capital. See Note 9 for additional information regarding the 2026 Private Placement. As of September 30, 2026, the Company had deferred offering costs.
Costs directly attributable to the issuance of equity instruments are recorded as a reduction of the related proceeds within additional paid-in capital. When an equity financing includes more than one class of equity instrument, issuance costs are allocated among the instruments based on their relative fair values at issuance; costs allocated to any liability-classified instrument are charged to expense as incurred. |
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| Leases | Leases
The Company determines whether an arrangement is a lease at inception. For leases where the Company is the lessee, right-of-use (ROU) assets are recognized as the lease liability, adjusted for lease incentives received and prepayments made. Lease liabilities are recognized based on the present value of remaining lease payments over the lease term. When the rate implicit in a lease is not readily determinable, the Company uses its estimated incremental borrowing rate, determined on a collateralized basis over a term similar to the lease term, based on information available at the commencement date. Operating lease cost is recognized on a straight-line basis over the lease term.
The Company has elected the short-term lease practical expedient and applies it consistently to all leases with an initial term of 12 months or less. Such leases are not recorded on the condensed consolidated balance sheets and the related lease cost is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient under ASC 842-10-15-37 not to separate non-lease components from the lease components to which they relate, and has applied this election to real estate, its only class of underlying asset. Accordingly, each lease component and its associated non-lease components are accounted for as a single lease component. Variable payments that do not depend on an index or rate are excluded from the measurement of lease liabilities and are recognized as variable lease cost in the period in which the obligation is incurred. |
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| Excise Tax | Excise Tax
The Company is subject to a 1% U.S. federal excise tax under the Inflation Reduction Act of 2022 on the fair market value of stock it repurchases, including redemptions, net of the fair market value of stock it issues during the same taxable year. The Company records the excise tax as a liability with a corresponding reduction to stockholders’ equity in the period the repurchase occurs. Interest and penalties on unpaid excise tax are recognized in Other Income (Expense) on the condensed consolidated statement of operations as incurred. See Note 6 for the Company’s excise tax liability related to pre-Closing redemptions. |
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| Foreign Operations | Foreign Operations
The Company ceased research and development operations at its Taiwan location during the three months ended March 31, 2025, and the subsidiary has had no significant operations since that date. |
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| Revenue Recognition | Revenue Recognition
Revenue is recognized when a performance obligation is satisfied by transferring control of promised products or services to customers, in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Revenue from product sales is recognized at a point in time when control transfers to the customer. This is generally when title, ownership and risk of loss pass to the customer.
Research and development services for U.S. government agencies under firm-fixed-price contracts are accounted for under ASC 606 when the government agency obtains goods or services from the Company’s ordinary activities in exchange for consideration. |
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| Research and Development | Research and Development
All research and development costs are expensed as incurred. Research and development expenses consist primarily of personnel expenses, including salaries, benefits, third party technology validation testing, equipment, engineering, maintenance of facilities, data analysis, and materials. Research and development expenses are presented net of government grant funding, as described below. |
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| Government Grants | Government Grants
Government grants are transfers of assets from a government entity that are not exchange transactions. Until the Company adopts ASU 2025-10, Government Grants (Topic 832), which is effective for fiscal years beginning after December 15, 2028, it accounts for government grants by analogy to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance. A grant is recognized when there is reasonable assurance that the Company will comply with the conditions attached and that the grant will be received. It is recognized in the periods in which the related costs are incurred.
Funding received from U.S. government agencies under cost-sharing research awards, such as cooperative agreements, is recorded as a reduction of research and development expense, or as a reduction of the cost of the related asset when the funding reimburses equipment purchases. |
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| Selling, General and Administrative Expenses | Selling, General and Administrative Expenses
Selling, general and administrative expenses represent costs incurred by the Company in managing the business, including salary, benefits, stock-based compensation, sales, insurance, professional fees and other operating costs associated with the Company’s non-research and development activities. |
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| Cash Bonuses | Cash Bonuses
Cash signing and retention bonuses that are earned in installments over a required service period are accounted for under ASC 710 and recognized as compensation expense on a straight-line basis over the total required service period, with cumulative expense at each reporting date not less than the amount earned to date. If payment of the bonus is accelerated upon a qualifying termination, any unrecognized amount is expensed when the triggering event becomes probable. Annual performance bonuses are accrued over the performance period when payment is probable and the amount can be reasonably estimated. |
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| Stock-Based Compensation | Stock-Based Compensation
The Company has an incentive equity plan, (“2023 Equity Incentive Plan”). Under the terms of the plan, Solidion’s employees, consultants and directors, and employees and consultants of its affiliates, may be eligible to receive awards in the form of incentive stock options (“ISOs”) to employees and for the grant of non-statutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees, directors and consultants.
The number of shares of common stock initially reserved for issuance under the incentive plan is 190,000. Shares subject to stock awards granted under the incentive plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under the incentive plan. The incentive plan also includes an evergreen provision that provides for an automatic annual increase to the number of shares of common stock available for issuance under the incentive plan on the first day of each fiscal year beginning with the 2024 fiscal year, equal to the least of (i) 190,000 shares of common stock, (ii) 5% of the total number of shares of common stock outstanding as of the last day of our immediately preceding fiscal year, or (iii) such lesser amount determined by the plan administrator.
On February 13, 2026, the Company filed a Registration Statement on Form S-8 with the Securities and Exchange Commission registering 1,084,908 shares of common stock issuable under the 2023 Long-Term Incentive Plan, which became effective upon filing. As of September 30, 2026, 76,594 shares have been granted under the Plan, of which and 6,667 shares were cancelled and returned to the plan during the three and nine months ended September 30, 2026, and 444,981 shares remain available for future issuance.
The Company measures stock options and restricted stock unit awards granted to employees, non-employees, and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards, over the requisite service period, which is generally the vesting period of the respective award. Options granted under the 2023 Equity Incentive Plan vest at the rate specified in the stock option agreement as determined by the plan administrator. The plan administrator determines the term of stock options granted under the incentive plan, up to a maximum of ten years. Forfeitures are accounted for as they occur.
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Stock-based compensation expense for restricted stock units is measured based on the grant-date fair value of the awards and recognized as expense over the requisite service period, which is generally the vesting period. The Company has elected to use the accelerated attribution method, under which each vesting tranche of an award is treated as a separate award and expensed over its respective vesting period. The Company accounts for forfeitures as they occur, reversing previously recognized compensation cost for unvested awards in the period the award is forfeited.
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company lacks a sufficient history of company-specific historical and implied volatility information for its common stock. The Company therefore estimates its expected stock price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price.
The expected term of all of the Company’s stock options has been determined utilizing the “simplified” method. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on its common stock and does not expect to pay any cash dividends in the foreseeable future.
On October 18, 2026, the Company filed a definitive proxy statement for its 2026 Annual Meeting of Stockholders, to be held on November 18, 2026, which includes a proposal to amend the 2023 Equity Incentive Plan to increase the number of shares of common stock authorized for issuance thereunder by 975,000 shares. The amendment is subject to stockholder approval, and there can be no assurance that it will be approved. |
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| Income Taxes | Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
The Company files income and franchise tax returns with the United States, Texas, and Ohio. Examinations by the United States and state tax authorities may include questioning the timing and amount of deductions, the nexus of income among various state and local tax jurisdictions and compliance with federal and state tax laws. As of September 30, 2026, all tax years since the 2021 inception year are subject to examination for U.S. federal and state purposes. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
In July 2025, the One Big Beautiful Bill Act (Public Law 119-21) was enacted. The Company recognized the income tax effects of the legislation in the period of enactment in accordance with ASC 740, which did not have a material impact on the Company’s financial statements. The Company continues to evaluate the impact of the legislation on future periods. |
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| Net Income (Loss) per Common Stock | Net Income (Loss) per Common Stock
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period.
The calculation of diluted loss per share of common stock does not include potentially dilutive common stock equivalents if their inclusion would be anti-dilutive as of September 30, 2026 and 2025. As such, net loss per common stock is the same for basic and diluted loss per share for the nine months ended September 30, 2026.
The following table presents potentially dilutive common stock equivalents that have been included in the calculation of dilutive income per share for the three months ended September 30, 2026, as their inclusion would be dilutive.
The following table presents potentially dilutive common stock equivalents that have been excluded from the calculation of dilutive loss per share for the nine months ended September 30, 2026, as their inclusion would be anti-dilutive:
The following table presents potentially dilutive common stock equivalents that have been excluded in the calculation of dilutive income per share for the three months ended September 30, 2025, as their inclusion would be anti-dilutive.
The following table presents potentially dilutive common stock equivalents that have been included in the calculation of dilutive income per share for the nine months ended September 30, 2025, as their inclusion would be dilutive.
The Pre-Funded Warrants issued in the 2026 Private Placement are included in the computation of basic net loss per share from their issuance date because the shares of common stock underlying the Pre-Funded Warrants are issuable for nominal consideration ($0.0001 per share) and there are no remaining contingencies or vesting conditions associated with their exercise. The Placement Agent Warrants are excluded from the computation of diluted net loss per share for the periods presented because their effect would be antidilutive. |
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| Concentration of Credit Risk | Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions, which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000, and money market funds, which are not insured. As of September 30, 2026, the Company’s cash deposits and money market funds were substantially in excess of federally insured limits. The Company has not experienced any losses on these accounts. |
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments
Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. US GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). See Note 13. |
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| Equity-Linked Instruments | Equity-Linked Instruments
The Company evaluates all equity-linked contracts, including warrants and the Forward Purchase Agreement (“FPA”), to determine classification as either equity or liability in accordance with FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and FASB ASC 815, Derivatives and Hedging (“ASC 815”). This assessment considers whether the instruments meet the fixed-for-fixed equity classification criteria and whether any provisions require liability treatment, including potential “net cash settlement” outside of the Company’s control. Instruments that qualify for equity classification are recorded as a component of additional paid-in capital, while those requiring liability classification are measured at fair value, with subsequent changes recorded in earnings. This assessment is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the FPA and warrants are outstanding. |
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| Warrants | Warrants
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are recorded at fair value on the date of issuance and remeasured at each balance sheet date thereafter, with changes in fair value recognized in the statement of operations. The Company evaluates each warrant instrument under ASC 815-40 40 to determine whether it is indexed to the Company’s own stock and whether it meets the conditions for equity classification criteria and do not contain provisions that would require liability classification.
The Company accounts for the outstanding Series A warrants issued in connection with the March 2024 private placement financing (the “PIPE Warrants”) as liability-classified instruments because certain settlement adjustments prevent them from meeting the fixed-for-fixed equity classification criteria under ASC 815-40. The Company utilizes the Black-Scholes options pricing model to determine the fair value of the Series A and Series B warrants, and a Monte Carlo simulation model to determine the fair value of the Series C and Series D warrants. The resulting fair value is recorded as a derivative liability on the condensed consolidated balance sheets, and with changes in the fair value of the PIPE Warrants recorded as a non-cash other income (expense) within change in fair value of derivative liabilities account on the Company’s condensed consolidated statements of operations. See Notes 8 and 13 for the classification and measurement of the Company’s outstanding warrants. |
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| Forward Purchase Agreement | Forward Purchase Agreement
The Company accounts for the FPA as either equity-classified or liability-classified instruments based on an assessment of the FPA specific terms and applicable authoritative guidance under FASB ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the FPA meets all of the requirements for equity classification under ASC 815, including whether the FPA is indexed to the Company’s own common shares and whether the FPA holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time of FPA issuance and as of each subsequent quarterly period end date while the FPA is outstanding.
The Company has determined that the FPA does not meet all of the criteria for equity classification under ASC 815, as the FPA fails the fixed-for-fixed test under ASC 815-40 due to the bi-weekly Reset Price mechanism, the Dilutive Offering Reset provision, and the VWAP Trigger Event, each of which creates variability in the settlement amount that is not purely a function of the Company’s own stock price. Accordingly, the FPA is classified as a liability-classified derivative instrument, recorded at fair value on the date of issuance and remeasured at fair value at each balance sheet date thereafter. The Company utilizes a Monte Carlo simulation model to determine the fair value of the FPA. The resulting fair value is recorded as a derivative liability on the condensed consolidated balance sheets. The Company records changes in the fair value of the FPA as a non-cash other income (expense) within change in fair value of derivative liabilities account on the Company’s condensed consolidated statements of operations.
Upon the issuance of shares in connection with the FPA, the Company recognizes (i) an increase to APIC measured at the fair value of the FPA at the time of share issuance, (ii) a corresponding stock subscription receivable of equal amount as a contra-equity component within stockholders’ equity (deficit), representing the present value of the consideration receivable for the shares issued, and (iii) a loss on issuance of common stock within Other Income (Expense) representing the difference between the face value of the stock subscription receivable and its present value at the issuance date. The discount between the face value and present value of the stock subscription receivable is accreted using the effective interest method over the remaining term of the FPA, with each period’s accretion recorded as an increase to both the stock subscription receivable and APIC within stockholders’ equity (deficit). The stock subscription receivable is presented as a reduction to total stockholders’ equity (deficit) and is relieved as Optional Early Termination proceeds are received from the Forward Purchase Investor.
On September 22, 2026, the FPA was terminated in connection with the settlement of litigation between the Company and the Forward Purchase Investor. See Note 9 for further information. |
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| Reverse Stock Split | Reverse Stock Split
On May 12, 2025, the Company effected a 1-for-50 reverse stock split of its common stock. As a result, each 50 shares of common stock issued and outstanding immediately prior to the reverse split were converted into one share of common stock. Additionally, this transaction resulted in a reclassification of $13,311 from common stock to additional paid-in capital during the three months ended March 31, 2025. The reverse stock split did not change the total number of authorized shares or the par value of the common stock. During the three month period ended June 30, 2025, the Company paid cash of approximately $460 to shareholders in lieu of issuing fractional shares.
In accordance with SEC Staff Accounting Bulletin Topic 4C, all share and per-share amounts in the accompanying condensed consolidated financial statements and notes have been retroactively adjusted to reflect the reverse stock split for all periods presented. |
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| Recently Issued Accounting Standards | Recently Issued Accounting Standards
In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to improve disclosures by providing more detailed information about the types of expenses in commonly presented expense captions. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its condensed consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities,” which establishes comprehensive guidance under U.S. GAAP for the recognition, measurement, presentation, and disclosure of government grants received by business entities. The ASU is effective for public business entities for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the effect this standard may have on its condensed consolidated financial statements and related disclosures in light of its government grant activity.
In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements,” which clarifies the applicability of the interim reporting guidance, improves the organization and navigability of the interim disclosure requirements, and introduces a disclosure principle requiring entities to disclose events occurring after the most recent annual reporting period that have a material effect on the entity. The ASU is effective for public business entities for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. Entities may apply the amendments prospectively or retrospectively to any or all prior interim periods presented. The Company is currently evaluating the effect this standard may have on its condensed consolidated financial statements and related disclosures. |
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