v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The carrying values of the Company's cash, cash equivalents and restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued and other current liabilities are determined to be a Level 1 measurement. The carrying values of these items approximate their fair values due to their short-term nature. The estimated fair value of the Company's long-term borrowings is determined by Level 2 inputs and based primarily on quoted market prices for the same or similar issues. As of June 30, 2025, the Perceptive Term Loan Facility had a carrying value of $21.4 million and a fair value of $22.0 million. The estimated fair value of the Perceptive Term Loan Facility was determined based on a discounted cash flow approach using available market information on discount and borrowing rates with similar terms, maturities, and credit ratings. The aggregate carrying value of the Company's other long-term borrowings as of June 30, 2025 and December 31, 2024 was $1.5 million and $1.1 million, respectively, and approximated its fair value.
Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
The three levels of the valuation hierarchy for disclosure of fair value measurements are defined as follows:
Level 1 -    Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 -    Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and
Level 3 -    Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.
The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company's financial instruments that were measured at fair value on a recurring basis within the fair value hierarchy (in thousands):
 
 June 30, 2025
 TotalLevel 1Level 2Level 3
Assets:
Money market funds, included in cash and cash equivalents$— $— $— $— 
Liabilities:
Warrant liability$3,963 $— $— $3,963 
 
 December 31, 2024
 TotalLevel 1Level 2Level 3
Assets:
Money market funds, included in cash and cash equivalents$15,144 $15,144 $— $— 
The fair value of the Company's money market funds is based on quoted market prices.
Warrant Liability

The Company recorded a liability for the Warrant Certificate issued in connection with the Perceptive Term Loan Facility at fair value utilizing a probability-weighted BSM option pricing model using significant unobservable inputs consisting of the Company's probability assessment of drawing future debt tranches, the inputs used for the Company’s stock-based compensation expense adjusted for the Warrant Certificate’s expected term, which is calculated based on the remaining contractual term, and the fair value of the underlying common stock. As such, the warrant liability was determined to be a Level 3 fair value measurement.

The assumptions used in the BSM option pricing model to determine the fair value of the warrant liability were as follows:
April 25, 2025 (Warrant Certificate Issuance Date)June 30, 2025
Fair value of underlying common stock$6.21 $6.98 
Exercise price
$4.96 - $6.99
$4.96 - $7.85
Risk-free interest rate4.3 %
4.2% - 4.3%
Expected volatility88.8 %
88.1% - 88.3%
Expected term (in years)10.0
9.8 - 10.0
Expected dividend yield— %— %

The probability assessment considers both the likelihood of the Company satisfying certain conditions, including specified revenue milestones, which give the Company the option to draw future debt tranches as well as the likelihood that the Company will exercise the right to draw one or more future debt tranches. The Company assessed these factors at inception and as of June 30, 2025 and applied a weighted-average probability of approximately 33% in the measurement of fair value, given current and forecasted capital needs. Significant increases or decreases in the probability assessment in future periods may increase or decrease the fair value estimate of the warrant liability, respectively. The interrelationship between these inputs is insignificant.

The following table provides a reconciliation of the warrant liability measured at fair value using Level 3 significant unobservable inputs (in thousands):
Warrant Liability
Balance at December 31, 2024
$— 
Fair value of warrant liability3,525 
Change in fair value of warrant liability438 
Balance at June 30, 2025
$3,963