NOTE 6 – FAIR VALUE MEASUREMENTS

Fair value measurements affect the Company’s accounting for certain of its financial assets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured according to a hierarchy that includes:

As of March 31, 2025, and December 31, 2024, the Company used Level 1 quoted prices in active markets to value cash equivalents of $75.7 million and $24,000, respectively. The Company did not have any Level 2 or Level 3 assets or liabilities as of March 31, 2025. As of December 31, 2023, Level 3 liabilities included a portion of the Series D Warrants and all Series C Warrants issued in December 2023, which did not meet the criteria for equity classification due to insufficient authorized shares to settle the instruments and were therefore accounted for as liabilities at fair value. After the Company received stockholder approval to increase the number of authorized shares on January 25, 2024, the liability classified Series D Warrants and the Series C Warrants met all requirements for equity classification and, as a result, the Company reclassified them to equity as of January 25, 2024.

From December 31, 2023 to the reclassification date, the Company recognized a change in fair value resulting in a gain of $7.0 million related to the liability-classified warrants prior to meeting the criteria for equity classification. Changes in the fair value of the liability-classified warrants are recognized as a separate component in the consolidated statement of operations.