Quarterly report [Sections 13 or 15(d)]

WARRANT LIABILITIES

v3.26.1
WARRANT LIABILITIES
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
WARRANT LIABILITIES

NOTE 7 – WARRANT LIABILITIES

 

Series A Warrants

 

The Company issued Series A warrants (the “Series A Warrants”) in connection with the sale of common units and pre-funded warrant units. Under the terms of the Series A Warrants, the number and exercise price are subject to adjustment if the Company completes certain transactions specified in applicable warrant agreements. In addition, the Series A Warrants have a cashless exercise provision, which would allow holders to cashless exercise one warrant for three shares of the Company’s common stock. Such adjustment provisions of the Series A Warrants were initially subject to stockholder approval, which was received on January 12, 2024. The Company initially determined that these warrants should be classified as liabilities and used a Monte Carlo simulation to estimate the fair value until stockholder approval of the cashless exercise provision was completed.

 

Subsequent to the approval by stockholders of the cashless exercise provision of the Series A Warrant, the fair value of each Series A Warrant is the value of three shares of the Company’s common stock. Based on the closing price of the Company’s common stock on March 31, 2026 of $4.23, the fair value of each Series A Warrant is $12.69 and based on the total number of warrants outstanding of 10,008, the warrant liability for Series A Warrants is $127,002 at March 31, 2026.

 

The following represents the activity associated with the Series A Warrants for the three months ended March 31, 2026:

     
Fair value on January 1, 2026   $ 64,985  
Loss on change in fair value     62,017  
Balance at March 31, 2026   $ 127,002  

 

The balance is classified in other current liabilities in the condensed consolidated balance sheet.