On June 12, 2025, in connection with the sale and issuance common stock as part of the June 2025 Private Placement, the Company issued Pre-Funded Warrants to purchase up to an aggregate of 2,000,000 shares of Common Stock at an exercise price of $0.001 per share, and Common Warrants to purchase up to an aggregate of 8,671,928 shares of Common Stock at an exercise price of $1.20 per share. Each Share and each Pre-Funded Warrant sold pursuant to the Securities Purchase Agreement was accompanied by one Common Warrant. The combined purchase price of each Share and accompanying Common Warrant was $1.325 (which included $0.125 per Common Warrant in accordance with the rules and regulations of Nasdaq). The combined purchase price of each Pre-Funded Warrant and accompanying Common Warrant was $1.324 (equal to the combined purchase price per Share and accompanying Common Warrant, minus $0.001).

The Common Warrants can be exercised into either common stock or Pre-Funded Warrants at the holder options, and both Common Warrants and Pre-Funded Warrants contain purchase rights that could result in holders receiving securities that more than offsets or neutralizes the effect of a distribution event. As a result of the aforementioned provisions, both Common Warrants and Pre-Funded Warrants fail the indexation guidance under ASC 815 and are classified as liabilities. The Pre-Funded Warrants and Common Warrants liabilities were recorded at fair value as of the issuance date and June 30, 2025, and subject to adjustment to estimated fair value at each balance sheet date until the warrants are settled.

The proceeds from June 2025 Private Placement were first allocated to the full fair value of the Pre-Funded Warrants and Common Warrants due to the liability classification. As disclosed in Note 3, the fair value of the Pre-Funded Warrants and Common Warrants at issuance was $10.7 million. The remaining proceeds of $0.8 million, before issuance costs, were allocated to the Common Stock.

During the three and six months ended June 30, 2025, the Company recognized a fair value loss on warrant liability of $4.5 million. Proceeds from June 2025 Private Placement are shown as cash from financing transactions and the loss on the change in fair value of the warrant liability is included as an adjustment to reconcile the net loss to net cash used in operating activities in the statements of cash flows for the six months ended June 30, 2025.

In addition, offering expenses of $872 thousand out of total offering expenses of $938 thousand million related to the June 2025 Private Placement were recorded as a component of other expenses as the proceeds were allocated to the warrant liability. The offering expenses were allocated to each instrument based on their respective fair value at issuance.

All of the Pre-Funded Warrants and Common Warrants issued in connection with the June 2025 Private Placement remained outstanding as of June 30, 2025. The following table is a summary of the Company’s warrants outstanding as of June 30, 2025:


	Number of Common Stock Issuable		Exercise Price		Expiration Date
Pre-Funded Warrants		2,000,000	$	0.001	None
Common Warrants		8,671,928	$	1.20	June 12, 2030