Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report (this "Quarterly Report") to "we," "us" or the "Company" refer to Valuence Merger Corp. I. References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer to VMCA Sponsor, LLC (f/k/a Valuence Capital, LLC). The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes "forward-looking statements" that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available.

A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (the "SEC") on March 31, 2026 (the "Annual Report"). The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

Valuence Merger Corp. I was incorporated in the Cayman Islands on August 27, 2021. The Company was formed for the purpose of entering into a Business Combination.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

The Registration Statement for our IPO was declared effective on February 28, 2022. On March 3, 2022, we consummated the sale of 20,000,000 Units. On March 4, 2022 the underwriters of the IPO partially exercised their over-allotment option and, in connection therewith, on March 8, 2022 we consummated the issuance and sale of an additional 2,009,963 Units. Each Unit consists of one Class A ordinary share and one-half of one Public Warrant. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $220,099,630.

Simultaneously with the closing of the IPO, we consummated the sale of 6,666,667 Private Placement Warrants, at a price of $1.50 per Private Placement Warrant in a private placement, consisting of 2,666,667 Private Placement Warrants issued to our Sponsor and 4,000,000 Private Placement Warrants issued to Valuence Partners LP, generating gross proceeds of $10,000,000.

Simultaneously with the exercise of the over-allotment, we consummated the sale of an additional 267,995 Private Placement Warrants to the Sponsor, generating gross proceeds of $401,993.

Offering costs for the IPO and the exercise of the underwriters' over-allotment option amounted to $10,718,994, consisting of $4,000,000 of underwriting fees, net of $2,200,996 reimbursed from the underwriters, $8,105,480 of deferred underwriting fees payable (which are held in the Trust Account) and $814,510 of other costs. The $8,105,480 of deferred underwriting fee payable is contingent upon the consummation of a Business Combination, subject to the terms of the underwriting agreement.

Following the closing of the IPO and partial exercise of the over-allotment, $226,702,619 ($10.30 per Unit) from the net proceeds of the sale of the Units in the IPO and the Private Placement Warrants was placed in the Trust Account and was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the Trust Account. On March 1, 2024, the Company entered into the IMTA Amendment, which provides that the trustee of the Trust Account may, at the direction of the Company (i) hold funds uninvested, (ii) hold funds in an interest-bearing or non-interest bearing bank demand deposit account at a U.S. chartered commercial bank with consolidated assets of $100 billion or more selected by the trustee that is reasonably satisfactory to the Company, or (iii) invest and reinvest the Property (as defined in the IMTA) in solely United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less, or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated under the Investment Company Act (or any successor rule), which invest only in direct U.S. government treasury obligations, as determined by the Company. On the same day, pursuant to the IMTA Amendment, the Company instructed Continental Stock Transfer and Trust Company to move the Trust Account out of an investment in securities and into an interest-bearing bank deposit account. As a result, the remaining proceeds from the IPO and sale of Private Placement Warrants are no longer invested in U.S. government securities or money market funds. Investing in our securities is not intended for persons who are seeking a return on investments in government securities or investment securities.

In connection with the May 2023 Meeting, as described below, shareholders holding an aggregate of 15,799,245 Class A ordinary shares properly exercised their right to redeem their shares for $167,831,206. After the satisfaction of such redemptions, the balance in our Trust Account was approximately $65.7 million. In connection with the June 2024 Meeting, shareholders holding an aggregate of 4,343,316 Class A ordinary shares properly exercised their right to redeem their shares for $49,900,380. In connection with the February 2026 Meeting, shareholders holding an aggregate of 1,404,164 Class A ordinary shares properly exercised their right to redeem their shares for $17,565,141.25. After the satisfaction of such redemptions, the balance in our Trust Account was approximately $5,794,794. The balance in our Trust Account was $5,914,944 as of June 30, 2026.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

Extraordinary General Meetings

On May 25, 2023, the Company held the May 2023 Meeting, where shareholders approved, among other things, an amendment to the Articles to extend the date by which the Company must consummate a Business Combination from June 3, 2023 to September 3, 2023 and to allow us, without another shareholder vote, by resolution of our Board of Directors, to elect to further extend the Combination Period in one-month increments up to eighteen (18) additional times, or a total of up to thirty-six (36) months after the Initial Public Offering, until up to March 3, 2025. In connection with such extensions to the Combination Period, the Sponsor or its designees was required to deposit into the Trust Account, as a loan, $420,000 for the extension to September 3, 2023 and $140,000 for each monthly extension thereafter. The Company's shareholders also approved an amendment to the Articles to eliminate (i) the limitation that we may not redeem Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 and (ii) the limitation that we shall not consummate a Business Combination unless we have net tangible assets of at least $5,000,001 immediately prior to, or upon consummation of, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to, such Business Combination. The Company's shareholders also approved an amendment to the Articles to permit a holder of our Class B ordinary shares to convert such shares into Class A ordinary shares on a one-for-one basis at any time and from time to time prior to the closing of a Business Combination at the election of the holder. Under Cayman Islands law, the amendments to our Articles took effect upon approval of the Combination Period. In connection with the May 2023 Meeting, holders of 15,799,245 Class A ordinary shares subject to possible redemption exercised their right to redeem such shares. As a result, the Company paid $167,831,206 (or $10.62 per share) to the redeeming shareholders. After redemptions, the Company had 6,210,718 Class A ordinary shares subject to possible redemption outstanding. The Company, with the approval by the Board of Directors, extended the Combination Period to June 3, 2024 and caused to be deposited an additional $1,680,000 into the Company's Trust Account.

On June 3, 2024, the Company held the June 2024 Meeting, where shareholders approved an amendment to the Articles to extend the Combination Period from June 3, 2024 for an initial two month period to August 3, 2024 and to permit the Company, without another shareholder vote, by resolution of the Board of Directors to elect to further extend such date up to nineteen (19) additional times for an additional one (1) month each time, up to March 3, 2026, provided that the Sponsor or its designees deposit into the Trust Account (i) on June 4, 2024, with respect to the initial extension, an amount equal to the lesser of (x) $60,000 or (y) $0.03 per public share multiplied by the number of Public Shares outstanding and (ii) one business day following the public announcement by the Company that the Board of Directors has elected to further extend such date for an additional month, an amount equal to the lesser of (x) $30,000 or (y) $0.015 per public share multiplied by the number of Public Shares outstanding. In connection with the June 2024 Meeting, holders of 4,343,316 Class A ordinary shares subject to possible redemption exercised their right to redeem such shares. As a result, the Company paid $49,900,380 (or $11.49 per share) to the redeeming shareholders. After redemptions, the Company had 1,867,402 Class A ordinary shares subject to possible redemption outstanding.

On February 27, 2026, the Company held the February 2026 Meeting, where shareholders approved an amendment to the Articles to extend the Combination Period from March 3, 2026 for an initial two month period to May 3, 2026 and to permit the Company, without another shareholder vote, by resolution of the Board of Directors to elect to further extend such date up to ten (10) additional times for an additional one (1) month each time, up to March 3, 2027, provided that the Sponsor or its designees deposit into the Trust Account (i) on March 4, 2026, with respect to the initial extension, an amount equal to the lesser of (x) $56,000 or (y) $0.06 per public share multiplied by the number of Public Shares outstanding and (ii) one business day following the public announcement by the Company that the Board of Directors has elected to further extend such date for an additional month, an amount equal to the lesser of (x) $28,000 or (y) $0.03 per public share multiplied by the number of Public Shares outstanding. In connection with the February 2026 Meeting, holders of 1,404,164 Class A ordinary shares subject to possible redemption exercised their right to redeem such shares. As a result, the Company paid $17,565,141.25 (or $12.51 per share) to the redeeming shareholders. After redemptions, the Company had 463,238 Class A ordinary shares subject to possible redemption outstanding.

Convertible Promissory Notes

On June 5, 2023, in connection with the required Initial Extension Contributions for monthly extensions to the Combination Period and for working capital purposes, the Company issued a non-interest bearing, unsecured convertible promissory note to the Sponsor in the aggregate principal amount of $613,207 and to Valuence Partners LP in the aggregate principal amount of $1,650,941. The Initial Extension Contribution Notes will be repayable by the Company upon the earlier of (i) consummation of a Business Combination and (ii) the date of the liquidation of the Company. Such loans may be converted into warrants of the post-Business Combination entity at the option of the payees, which shall have terms identical to the Private Placement Warrants. If the Company does not consummate a Business Combination by the end of the Combination Period, the outstanding principal amount of the Initial Extension Contribution Notes will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. The Initial Extension Contribution Notes were accounted for using the bifurcation method and it was determined that the conversion feature had no value and the Initial Extension Contribution Notes were recorded at par value. As of June 30, 2026, $613,207 is outstanding under the Sponsor Convertible Promissory Note and $1,650,941 has been borrowed under the VP Convertible Promissory Note.

On June 4, 2024, the Company issued the June 2024 Note to the Sponsor, in the principal amount of $300,000. The June 2024 Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the Company's initial Business Combination or (b) the date of the Company's liquidation. If the Company does not consummate an initial Business Combination by the Maturity Date, the June 2024 Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. Upon maturity, the outstanding principal balance of the June 2024 Note may be converted into warrants, at a price of $1.50 per warrant, at the option of the Sponsor, provided that the maximum aggregate conversion of all convertible notes issued to the Sponsor or its affiliates may not exceed $1.5 million. Such warrants will have terms identical to the Private Placement Warrants. On June 4, 2024, the Company borrowed $300,000 under the June 2024 Note. On June 30, 2026, the June 2024 Note was terminated and replaced by the 2026 Promissory Notes, as described further below.

On February 27, 2026, the Company issued the February 2026 Note to the Sponsor, in the principal amount of $1,500,000. The February 2026 Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the Company's initial Business Combination or (b) the Maturity Date. If the Company does not consummate an initial Business Combination by the Maturity Date, the February 2026 Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. Upon maturity, the outstanding principal balance of the February 2026 Note may be converted into warrants, at a price of $1.50 per warrant, at the option of the Sponsor, provided that the maximum aggregate conversion of all convertible notes issued to the Sponsor or its affiliates may not exceed $1.5 million. Such warrants will have terms identical to the Private Placement Warrants. As of June 30, 2026, no amounts had been drawn under the February 2026 Note.

On June 30, 2026, Valuence Merger Corp. I (the "Company"), entered into a Mutual Note Termination Agreement (the "Termination Agreement") with VMCA Sponsor, LLC (the "Sponsor"), pursuant to which the Company and the Sponsor agreed to terminate the Convertible Promissory Note, dated February 27, 2026, issued by the Company to the Sponsor in the principal amount of up to $1,500,000 (the "February 2026 Note"). No amounts had been drawn down, and no principal or other amount was outstanding, under the February 2026 Note .

Also on June 30, 2026, the Company entered into an Omnibus Note Exchange and Debt Conversion Agreement (the "Omnibus Agreement") with the Sponsor, CPC Sponsor Opportunities I, LP ("CPC I"), CPC Sponsor Opportunities I (Parallel), LP ("CPC I Parallel") and NovoCG, LLC ("NovoCG"), pursuant to which the parties agreed to restructure certain outstanding related-party indebtedness and advances of the Company. Pursuant to the Omnibus Agreement, the parties agreed to cancel, extinguish and terminate the Convertible Promissory Note, dated June 4, 2024, issued by the Company to the Sponsor in the principal amount of up to $300,000 (the "June 2024 Note"), which had been fully drawn and remained outstanding.

In connection with the Omnibus Agreement, the parties also agreed to settle and discharge outstanding balances classified as "Advance from Related Party" on the Company's books and records owed to CPC I, CPC I Parallel and NovoCG in the amounts of $446,900, $373,100 and $750,000, respectively, for an aggregate advance balance of $1,570,000.

In consideration for the cancellation of the June 2024 Note and settlement of the related-party advances, the Company issued three new convertible promissory notes, each dated June 30, 2026: (i) a note to CPC I in the principal amount of up to $1,500,000, with an initial deemed drawdown balance of $528,650; (ii) a note to CPC I Parallel in the principal amount of up to $1,500,000, with an initial deemed drawdown balance of $441,350; and (iii) a note to NovoCG in the principal amount of up to $3,000,000, with an initial deemed drawdown balance of $900,000 (collectively, the "New Notes" also referred to herein as the "2026 Promissory Notes"). The New Notes bear no interest and are repayable in full upon the earlier of (a) the date of the consummation of the Company's initial business combination or (b) the date of the Company's liquidation (the earlier of such date, the "Maturity Date"). If the Company does not consummate an initial business combination by the Maturity Date, the New Notes will be repaid only from funds held outside of the trust account established in connection with the Company's initial public offering (the "Trust Account") or will be forfeited, eliminated or otherwise forgiven. Upon maturity, the outstanding principal balance of the New Notes may be converted into warrants, at a price of $1.50 per warrant, at the option of the Sponsor, provided that the maximum aggregate conversion of all convertible notes issued to the Sponsor or its affiliates may not exceed $1.5 million. Such warrants will have terms identical to the warrants issued by the Company in a private placement that closed simultaneously with the Company's initial public offering.

Delisting from Nasdaq

On March 4, 2025, the Company received a notice from the staff of the Listing Qualifications Department of Nasdaq stating that because the Company had not completed a Business Combination within 36 months of the effective date of its IPO registration statement, it was not in compliance with Nasdaq listing rule IM 5101-2, and was therefore subject to delisting. Trading in the Company's securities on Nasdaq was suspended at the opening of business on March 11, 2025, and trading of the Company's securities on the over-the-counter market commenced shortly thereafter.

Results of Operations

As of June 30, 2026, we have not commenced any operations. All activity through June 30, 2026, relates to our formation, the IPO, and our search for an initial Business Combination. We will not generate any operating revenues until after the completion of a Business Combination, at the earliest. We will generate non-operating income in the form of interest income from the proceeds derived from the IPO placed in the Trust Account.

For the three months ended June 30, 2026, we had a net loss of $73,687, which consisted of general and administrative expenses of $111,321, offset by interest earned on cash held in the Trust Account of $37,634.

For the six months ended June 30, 2026, we had a net loss of $65,384, which consisted of general and administrative expenses of $243,123, offset by interest earned on cash held in the Trust Account of $177,739.

For the three months ended June 30, 2025, we had a net income of $58,716, which consisted of interest earned on investments held in the Trust Account of $185,332, offset by operating costs of $126,616.

For the six months ended June 30, 2025, we had a net income of $83,692, which consisted of interest earned on investments held in the Trust Account of $366,679, offset by operating costs of $282,987.

Liquidity and Capital Resources; Going Concern Consideration

As of June 30, 2026, we had cash of $8,795 and a working capital deficit of $5,118,177.

In connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," the Company has until up to March 3, 2027 to consummate a Business Combination or liquidate, provided that we cause to be deposited the Current Extension Contributions in connection with each monthly extension of the Combination Period. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation of the Trust Account and potential subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company's ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the end of the Combination Period (up to March 3, 2027, if we, without shareholder approval, elect to further extend the Combination Period monthly to such deadline). Based on the foregoing, management believes that the Company will not have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company's officers and directors to meet its needs through the earlier of the consummation of a Business Combination or one year from this Quarterly Report. However, the Working Capital Loans and the 2026 Promissory Notes may provide additional flexibility to continue our identification and pursuit of potential Business Combination targets. Over this time period, the Company will be using available funds, including those from the Working Capital Loans, for the purpose of paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2026. We do not participate in transactions that create relationships with entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

Other than the Initial Extension Contribution Notes and the 2026 Promissory Notes previously disclosed in this Quarterly Report, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. The underwriters are entitled to deferred underwriting commissions of $0.35 per Unit, or $8,105,480 from the closing of the IPO. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely if we complete a Business Combination, subject to the terms of the underwriting agreement.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our unaudited condensed financial statements may not be comparable to companies that comply with public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the unaudited condensed financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of executive compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.

Critical Accounting Estimates

The preparation of the unaudited condensed financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant item that involves critical accounting estimates is the value of conversion feature of the Company's promissory notes.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Ordinary Shares Subject to Possible Redemption

We account for our ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480, "Distinguishing Liabilities from Equity" ("ASC 480"). Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders' equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders' deficit section of our condensed balance sheets of the unaudited condensed financial statements contained elsewhere in this Quarterly Report.

Warrant Instruments

We account for the 17,939,643 warrants issued in connection with the Initial Public Offering and the underwriters' exercise of their over-allotment option as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in FASB Accounting Standards Codification ("ASC") 480, "Distinguishing Liabilities from Equity" ("ASC 480"), and ASC 815, "Derivatives and Hedging" ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of issuance costs of temporary equity at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrant issuance costs are required to be recorded at their initial fair value on the date of issuance, and each condensed balance sheet date thereafter. As the Company's warrants meet the criteria for equity classification, the Company has accounted for the warrants as equity classified.