Warrants Liability

6 Months Ended

Jun. 30, 2024

Other Liabilities Disclosure [Abstract]

The amount of warrants outstanding and fair value for all warrants as of June 30, 2024 and December 31, 2023 are as follows:


	June 30, 2024			December 31, 2023
	Number of Warrants Outstanding	Fair Value		Number of Warrants Outstanding	Fair Value
Warrants liability
IPO warrants	274,400	$	52	274,400	$	55
April 2023 warrants	16,000,000	7,368		16,000,000	6,276
May 2023 warrants	3,601,980	1,818		3,601,980	1,544
December 2023 warrants	34,482,759	23,264		34,482,759	19,586
Total	54,359,139	$	32,502	54,359,139	$	27,461
Warrants liability - related party
SPA Warrant	1	49,032		—	—
Contingent warrants(a)	—	92,264		—	—
Total	1	$	141,296	—	$	—

(a) Contingent warrants represent future issuable shares of stock. See Note 3, Credit and Securities Purchase Transaction for further discussion.

Warrants liability

The Company issued private placement warrants to B. Riley Financial, Inc. in conjunction with its initial public offering 2020 (“IPO warrants”).

In April 2023, the Company issued 16,000,000 shares of common stock and 16,000,000 private placement warrants to purchase shares of common stock. In May 2023, the Company issued another 3,601,980 shares of common stock and 3,601,980 private placement warrants to purchase shares of common stock (the “April 2023 warrants” and “May 2023 warrants”, respectively).

In December 2023, the Company issued in a combined public offering 34,482,759 shares of common stock and 34,482,759 accompanying common warrants to purchase shares of common stock (the "December 2023 warrants").

The IPO, April, May, and December 2023 Warrants are classified as Warrant liability on the Unaudited Condensed Consolidated Balance Sheets. The change in fair value of the IPO, April, May, and December 2023 Warrants is presented as Change in fair value of warrants on the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. See Note 15, Fair Value Measurements for further information.

Warrants liability- related party

SPA Warrant

At closing of the SPA with CCM Denali Equity Holdings, LP (the “Purchaser”), the Company issued to the Purchaser, one warrant to purchase 43,276,194 shares of Common Stock. The warrant has a ten-year term, a $0.01 per share exercise price, and is exercisable at the Purchaser’s discretion for cash or on a cashless basis. Upon an acceleration under the Credit Agreement, the Company could be required to purchase the warrant from the holder at an amount equal to the most recently quoted price. Prior to stockholder approval, the Company may not issue additional shares of Common Stock exceeding 19.99% of shares of Common Stock issued and outstanding as of the date of the Initial Draw. The warrant provides for certain anti-dilution adjustments. After stockholder approval, the Warrant Conversion Cap increases to 49.9%. See Note 3, Credit Agreement and Securities Purchase Transaction for additional information on this transaction.

Contingent Warrants

Following the Initial Draw, on three separate predetermined draw dates upon the achievement of the corresponding performance milestone for each such draw date, the Company will receive additional funds under the Credit Agreement and will issue securities under the SPA in an amount equal to the applicable percentage, up to an aggregate of 33.0% ownership limitation on a fully-diluted basis at such time the Delayed Draw Term Loan is fully drawn. Although these contingent warrants are not issued or exercisable until additional draws occur, they meet the definition of a derivative and are recognized at fair value with changes in fair value reported in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Both the SPA Warrant and the Contingent warrants are classified as Warrant liability- related party on the Unaudited Condensed Consolidated Balance Sheets. The change in fair value of the SPA and Contingent warrants is included in Change in fair value of derivatives- related parties on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss. See Note 15, Fair Value Measurements for further information.