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Note 11 - Warrant Liabilities
9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Earn-Out and Warrant Liabilities [Text Block]

11. Warrant Liabilities

 

Private Warrants to Acquire Common Stock

 

On July 1, 2021, the Company granted 405,000 private placement warrants with a 5-year term and an exercise price of $11.50 per share. Management has determined that the private placement warrants are to be classified as liabilities to be marked to market at each reporting period.

 

The private placement warrants are non-transferable and any transfer to an unrelated party would cause the warrants to be converted into public warrants. Consequently, the fair value of the private placement warrants is equivalent to the quoted price of the publicly traded warrants. Under this approach, the fair value of the private placement warrants on July 1, 2021, was determined to be $1.4 million. On April 10, 2025 (the “Private Warrants Transfer Date”), the private placement warrants were transferred to an unrelated party and converted into public warrants. As a result, the public warrants were reclassified from other liabilities to additional paid-in capital in the consolidated balance sheets by $1.5 million. Following the reclassification, there were no remaining private placement warrants. The fair value was remeasured as of the Private Warrants Transfer Date and December 31, 2024, and was determined to be $1.5 million and $1.9 million, respectively, and included in other liabilities in the condensed consolidated balance sheets. During the three and nine months ended September 30, 2025, a $0.0 million and a $0.4 million decrease in liability was recognized respectively, and during the three and nine months ended  September 30, 2024, a $0.3 million and $0.5 million increase in liability was recognized, respectively, and included as other income (expense), net in the condensed consolidated statements of income (loss).