Company: NKLR
Filing Date: 2025-11-17
Form Type: 10-Q
Source: 0001213900-25-111171
Chunk: 80

Company: Terra Innovatum Global N.V.
Filing Date: 2025-11-17
Form: 10-Q
Item: Part I, Item 2
Chunk 80
---

in changes in other non-current liabilities.

Net cash provided by operating
activities for the nine months ended September 30, 2024 was $12. This amount was related to (i) net income of $36, offset
by (ii) adjustments to reconcile net loss to net cash used in operating activities of $28, offset by working capital changes of
$4.

Net Cash Used by Investing Activities

Net cash used in investing activities for the nine months
ended September 30, 2025 was $94. This amount was related to purchases of equipment.

Net Cash provided by Financing Activities

Net cash provided by financing
activities for the nine months ended September 30, 2025 consisted of proceeds of $5,577 from the Bridge Loans, $195 from the
2025 Loan Agreement that we entered into with our quotaholders’ in the first quarter of 2025, capital contributions of $11, offset by
payment of debt issuance costs for Bridge Loans of $24.

32

Critical Accounting Policies and Estimates

Critical Accounting Policy: Warrants

Our financial statements are prepared in accordance
with U.S. GAAP. In connection with our financing activities, we have entered into bridge loan agreements that include detachable warrants.
The accounting treatment for these instruments is governed by ASC 480-10 (Distinguishing Liabilities from Equity) and ASC 815-40 (Contracts
in an Entity’s Own Equity). Based on the terms of the instruments, we first determine whether the warrants should be classified
as equity or liability. Warrants that do not meet all criteria for equity classification are initially recorded at fair value, classified
as a liability and subsequently remeasured at each reporting period. Warrants that meet all equity classification criteria are recorded
at their initial fair value and recognized as a component of additional paid-in capital. This accounting policy is considered critical
due to the complexity of the applicable guidance, the judgment required in classification, and the potential for material impact on our
financial statements.

Critical Accounting Estimate: Fair Value of Warrants 

The valuation of both equity-classified and liability-classified
warrants involves significant estimation uncertainty. We use option pricing models that require management to make assumptions about key
inputs, including expected volatility, risk-free interest rates, term to expiration, and the fair value of the underlying equity. These
inputs are inherently subjective and difficult to predict, and even small changes in any of them can materially affect the resulting fair
value. The