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Fair Value of Financial Instruments
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
Cash Equivalents
The fair value of the Company’s money market funds is based on the closing price of these assets as of the reporting date, which are included in cash equivalents. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices for identical instruments in active markets. As of December 31, 2025, and 2024 the Company had cash equivalent balances of $16.0 million and $0.0 million, respectively.
Digital Assets
The Company measures digital assets at fair value in accordance with ASC 820, Fair Value Measurement. Fair value is determined using quoted prices in active markets for identical assets (Level 1 inputs). Accordingly, the Company classifies its digital assets within Level 1 of the fair value hierarchy under ASC 820. The Company utilizes pricing information provided by the principal market, which is based on observable market prices from active trading exchanges. As of December 31, 2025 and 2024, the Company had digital asset balances of December 31, 2025, and 2024 the Company had digital asset balances of $10.3 million and $0.0 million, respectively.
Notes Payable & Related Party Notes Payable
The Company has elected to measure certain notes payable and related party notes payable at fair value. Specifically, the SPA Portfolio Notes or notes convertible into SPA Portfolio Notes as they contain embedded liquidation premiums with conversion rights that represent embedded derivatives (see Note 8, Notes Payable and Note 9, Related Party Transactions). The Company uses a binomial lattice model and discounted cash flow methodology to value the notes carried at fair value. The significant assumptions used in the models include the volatility of the Class A Common Stock, the Company’s expectations around the full ratchet anti-dilution and other triggering events, the discount rate applied to the Notes, which incorporates a market benchmark rate and a company-specific credit spread, annual dividend yield, and the expected life of the instrument. Because the valuation incorporates significant unobservable inputs, including the Company’s credit spread and expected triggering events, the instruments are classified within Level 3 of the fair value hierarchy.
The fair value adjustments related to notes payables and related party notes payable were recorded in Change in fair value of notes payable, warrant liabilities, and derivative call options or Change in fair value of related party notes payable, warrant liabilities, and derivative call options, respectively, in the Consolidated Statements of Operations and Comprehensive Loss.
For liabilities measured under the fair value option, the portion of the change in fair value attributable to instrument-specific credit risk is presented in other comprehensive income. The Company determines this amount by evaluating changes in the credit spread embedded in the discount rate used to value the convertible notes relative to a market benchmark rate. Changes in the benchmark component are considered market factors, while changes in the Company’s spread relative to the benchmark represent instrument-specific credit risk. During the periods presented, the Company’s credit spread did not change; accordingly, no portion of the change in fair value of the convertible notes was attributable to instrument-specific credit risk.
For notes payable and related party notes payable where the Company did not elect the fair value option pursuant to ASC 825, Financial Instruments, the carrying value approximates the fair value of the obligation.
2025 Convertible Note - AIXC
The fair value of the 2025 Convertible Note - AIXC was estimated using a Monte Carlo simulation model. Key inputs to the model include the AIXC’s stock price, expected equity volatility, the expected equity financing date, the contractual maturity date, risk-free interest rates, and an assessment of the Company’s credit risk. These inputs represent significant unobservable inputs and, accordingly, the instrument is classified within Level 3 of the fair value hierarchy.
Warrant Liabilities
The Company measures certain SPA Portfolio Note warrants, AIXC warrants, and Private Warrants assumed in the Business Combination, that are classified as liabilities, at fair value. The Company uses various option pricing models, including Monte Carlo simulation model, binominal lattice, and the Black Scholes model, to measure the fair value of the instruments based on the specific contractual features.
Significant assumptions used in the valuation models include the volatility of the Company’s Class A Common Stock (or AIXC’s common stock, as applicable), the Company’s expectations around potential down-round protection triggering events, contractual term, risk-free rate and expected annual dividend yield. Because the valuation of these instruments incorporates significant unobservable inputs, warrant liabilities are classified within Level 3 valuations of the fair value hierarchy.
Changes in fair value or warrant liabilities are recorded in Change in fair value of notes payable, warrant liabilities, and derivative call options or Change in fair value of related party notes payable, warrant liabilities, and derivative call options, in the Consolidated Statements of Operations and Comprehensive Loss
Derivative Call Options
Holders of the Junior Secured SPA Notes, the 2024 Unsecured SPA Notes, and 2025 March Unsecured SPA Notes were issued Incremental Warrants to purchase additional notes on the same terms and conditions up to the amounts originally funded under their commitments. The Company estimates the fair value of the Incremental Warrants using both a binomial lattice model and Monte Carlo simulation to value the Incremental Warrants as the Incremental Warrants entitle the holder to the relevant SPA Portfolio Note and SPA Portfolio Warrant upon exercise. The significant assumptions used include the volatility of the Company’s Class A Common Stock, the Company’s expectations around the full ratchet anti-dilution and other triggering events, the contractual term of the Incremental Warrants, the risk-free rate and annual dividend yield. The underlying convertible notes and the warrants issuable upon the exercise of the Incremental Warrant were assumed to be exercisable up to the maximum allowable amount. Additionally, the terms of these instruments were presumed to be consistent with those of the convertible notes and warrants issued in connection with the Incremental Warrants. Fair value measurements associated with the liability-classified derivatives represent Level 3 valuations under the fair value hierarchy.
The fair value adjustments related to the Incremental Warrants were recorded in Change in fair value of notes payable, warrant liabilities, and derivative call options or Change in fair value of related party notes payable, warrant liabilities, and derivative call options in the Consolidated Statements of Operations and Comprehensive Loss
Market-based Awards
In connection with his appointment as Global Co-CEO effective April 23, 2025, the Company entered into an offer letter with Yueting Jia that includes a market-based equity award, as further described in Note 14, Stock-Based Compensation. The award is contingent upon the achievement of specified stock price and market capitalization milestones and was granted outside of the Company’s existing equity incentive plans.
The fair value of the award is remeasured quarterly using a Monte Carlo simulation model based on a Geometric Brownian Motion framework. Significant assumptions used in the valuation included a stock price of $1.02, an effective date market capitalization of $76.4 million, a risk-free rate of 4.17%, a selected equity volatility of 80.0%, and an estimated contractual term of ten years. The remaining total derived service period for the award is 6.44 years, with expected milestone achievement dates between 2027 and 2032.
The Company concluded that the award qualifies for equity classification under ASC 718. However, because the Company does not currently have a sufficient number of authorized but unissued shares the award is classified as liability within Accrued Expenses and Other Current Liabilities in the Consolidated Balance Sheet for the period ended December 31, 2025. Shares based compensation expense is recorded in General and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss
Director Awards
On August 14, 2025, the Board of Directors approved restricted stock unit (“RSU”) awards with a target value of $150,000 for each of three non-employee directors, payable in shares of the Company’s Class A Common Stock pursuant to the Amended and Restated 2021 Stock Incentive Plan, as further described in Note 14, Stock-Based Compensation.
The closing price of the Company’s Class A Common Stock was $3.00 on August 14, 2025, representing an aggregate approved award value of $450,000 for the three directors. On December 31, 2025, the Board approved the use of the closing stock prices on August 14, 2025 and December 31, 2025 in determining the number of RSUs to be issued and authorized a make-whole adjustment to compensate the directors for the decline in the Company’s stock price between those dates. The closing price of the Company’s Class A Common Stock was $1.02 on December 31, 2025. At the time of approval, the Company did not have a sufficient number of authorized and unissued shares available for issuance. As a result, the Company classified these awards as liability-classified awards. The awards will continue to be accounted for as liabilities until the share sufficiency issue is resolved.
The fair value of the RSU awards was determined using the quoted market price of the Company’s Class A Common Stock, which represents an unadjusted quoted price in an active market for identical securities. Accordingly, the fair value measurement is classified within Level 1 of the fair value hierarchy under ASC 820, Fair Value Measurement.
Each RSU represents the right to receive one share of the Company’s Class A Common Stock upon vesting and settlement. The awards vest upon the earlier of the next annual meeting of stockholders following the grant date or April 15, 2026, subject to the director’s continued service through the applicable vesting date and stock based compensation expense is recorded in General and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss.
Recurring Fair Value Measurements
Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables present financial assets and liabilities remeasured on a recurring basis by level within the fair value hierarchy:
December 31, 2025
 (in thousands)Level 1Level 2Level 3
Assets:
Money-market funds$15,957 $— $— 
Digital assets$— $10,250 $— 
Liabilities:
Warrant liabilities1
$— $— $1,950 
Derivative call options1
$— $— $12,546 
Notes payable1
$— $— $56,376 
Market-based awards$— $— $2,371 
Director awards$261 $— $— 
1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities.
December 31, 2024
(in thousands)Level 1Level 2Level 3
Liabilities:
Warrant liabilities1
$— $— $28,864 
Derivative call options1
$— $— $29,709 
Notes payable1
$— $— $46,628 
_______________
1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities.
There were no transfers of assets and liabilities between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy during the years ended December 31, 2025, and 2024. The carrying amounts of the Company’s financial assets and liabilities, including cash, restricted cash, deposits, accounts payable, accrued liabilities and notes payable, other than the SPA
Portfolio Notes and the 2025 Convertible Note - AIXC, approximate fair value because of their short-term nature or contractually defined value.
The following table summarizes the activity of Level 3 fair value measurements:
(in thousands)
Warrant Liabilities1
Derivative Call Option1
Notes Payable1
Market-based award4
Balance as of December 31, 2024
$28,864 $29,709 $46,628 $— 
Additions49,364 
2
40,389 
2
133,505 
3
2,281 
Additions - Business Combination362 — 340 — 
Change in fair value measurements(21,848)(42,886)(39,787)90 
Conversions of notes to Class A Common Stock— — (84,310)— 
Warrant exercise(20,251)— — — 
Cancellation of Warrants(27,407)— — — 
Reclassification of liability classified warrants to equity(7,134)— — — 
Exercise of derivative call options— (14,666)— — 
Balance as of December 31, 2025
$1,950 $12,546 $56,376 $2,371 
_______________
1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities.
2 Addition to Warrant Liabilities and Derivative Call Option are included as loss in line items Change in fair value of notes payable, warrant liabilities, and derivative call options and Change in fair value of related party notes payable, warrant liabilities, and derivative call options in the Consolidated Statements of Operations and Comprehensive Loss. This information is presented to facilitate reconciliation to the related amounts reported in the Consolidated Statements of Operations and Comprehensive Loss.
3 Additions of Notes Payable measured at fair value are presented net of the initial fair value adjustment recorded at issuance. The aggregate fair value adjustment recognized at issuance reduced the principal amount of notes issued during the period by $24,265 thousand. This reduction reflects the allocation of total transaction proceeds between the SPA Notes and the related SPA Warrants and Incremental Warrants issued as part of the bundled transaction. In addition, the line item Change in fair value of notes payable, warrant liabilities, and derivative call options includes a loss of $6,044 thousand, and the line item Change in fair value of related party notes payable, warrant liabilities, and derivative call options includes a loss of $189 thousand, both of which relate to debt issuance costs. These costs are separately identifiable from the fair value adjustments described above and are not included in the Additions of Notes Payable This information is presented to facilitate reconciliation to the related amounts reported in the Consolidated Statements of Operations and Comprehensive Loss.
4 As discussed in Note 14, Stock-Based Compensation, the issuance date fair value of the Market-based award is $10.3 million and as of December 31, 2025 the fair value of the Market-based award was $19.3 million. Amounts displayed here represent vesting for the award based on the issuance date fair value and the subsequent remeasurement of amounts vested.

(in thousands)
Warrant Liabilities1
Derivative Call Option
Notes Payable1
Balance as of December 31, 2023
$306 $— $86,712 
Additions34,441 14,267 58,789 
Debt extinguishments— — 2,699 
Change in fair value measurements(5,723)15,442 (34,460)
Reclassification of liability classified warrants to equity(160)— — 
Conversions of notes to Class A Common Stock— — (67,112)
Balance as of December 31, 2024
$28,864 $29,709 $46,628 
1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities.