Quarterly report [Sections 13 or 15(d)]

DERIVATIVES

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DERIVATIVES
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES DERIVATIVES
Derivatives are complex financial instruments. The Company does not use derivatives to manage financial risks or as an economic hedge. The Company’s sole recorded derivative instrument arose as part of the issuance of Series A-1 preferred stock, $0.0001 par value per share (the “Series A-1 preferred stock”), to Searchlight IV KORE, LP (“Searchlight”), in which transaction Searchlight was also granted warrants (the “Penny Warrants”) which are exercisable for $0.05 per warrant or by means of a cashless exercise formula. The Penny Warrants are considered a freestanding derivative instrument, as they are separable and legally detachable from the Series A-1 preferred stock, were issued for nominal or no apparent consideration, and have the essential characteristics inherent in a derivative instrument of a notional amount, an underlying security, and a mechanism for net settlement.

Searchlight is also considered to be an affiliate of the Company, as described in Note 9 — Related Party Transactions.

The following table sets forth the details of the derivative instrument not designated as a hedging instrument as presented on the condensed consolidated balance sheets and notional amounts and exercise price as of June 30, 2025 and December 31, 2024:

As of: Number of Warrants (Notional Amount)
Warrant Liability (1)
Exercise Price Per Share
($ in thousands, except for exercise price per share)
June 30, 2025 12,024,711  $ 5,628  $ 0.05 
December 31, 2024 12,024,711  $ 7,624  $ 0.05 

(1) The Warrant Liability amounts are presented as “warrant liabilities to affiliates” in the Company’s condensed consolidated balance sheets and these balances are substantially comprised of the Penny Warrants liability. The balance of the Private Placement Warrants is effectively nil, as the value of the Private Placement Warrants has been nil since January 1, 2024.

The gains and losses arising from this derivative instrument not designated as a hedging instrument in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2025 and 2024 are set forth as follows:

Net Realized Gain (Loss) on Derivative Instruments
Net Change in Unrealized Gain (Loss) on Derivative Instruments (1)
Three Months Ended June 30, (in thousands)
2025 $ —  $ 192 
2024 $ —  $ 4,365 
Six Months Ended June 30,
2025 $ —  $ 1,996 
2024 $ —  $ 6,686 

(1) The amounts set forth above as presented in the condensed consolidated statements of operations and comprehensive loss are substantially comprised of the unrealized loss on the Penny Warrants reflected as “change in fair value of warrant liabilities to affiliates”. The unrealized gain or loss on the Private Placement Warrants is effectively nil, as the value of the Private Placement Warrants has been nil since January 1, 2024.