v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements

6. Fair Value Measurements

Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•
Level 1 – Quoted prices in active markets for identical assets or liabilities.
•
Level 2 – Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
•
Level 3 – Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values:

Description

 

Financial Assets

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

As of June 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 Assets

 

 

 

 

 

 

 

 

 

 

 

 

 Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 Money market funds

 

$

48,468

 

 

$

48,468

 

 

$

—

 

 

$

—

 

 Commercial paper

 

 

2,993

 

 

 

—

 

 

 

2,993

 

 

 

—

 

 Total cash equivalents

 

 

51,461

 

 

 

48,468

 

 

 

2,993

 

 

 

—

 

 Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 Commercial paper

 

 

41,816

 

 

 

—

 

 

 

41,816

 

 

 

—

 

 Total marketable securities

 

 

41,816

 

 

 

—

 

 

 

41,816

 

 

 

—

 

 Derivative financial asset

 

 

600

 

 

 

—

 

 

 

—

 

 

 

600

 

 Total financial assets

 

$

93,877

 

 

$

48,468

 

 

$

44,809

 

 

$

600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 Assets

 

 

 

 

 

 

 

 

 

 

 

 

 Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 Money market funds

 

$

25,522

 

 

$

25,522

 

 

$

—

 

 

$

—

 

 Commercial paper

 

 

15,433

 

 

 

—

 

 

 

15,433

 

 

 

—

 

 Total cash equivalents

 

 

40,955

 

 

 

25,522

 

 

 

15,433

 

 

 

—

 

 Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 U.S. Treasury and government-sponsored enterprises

 

 

3,014

 

 

 

—

 

 

 

3,014

 

 

 

—

 

 Commercial paper

 

 

40,726

 

 

 

—

 

 

 

40,726

 

 

 

—

 

 Corporate debt securities

 

 

24,334

 

 

 

—

 

 

 

24,334

 

 

 

—

 

 Total marketable securities

 

 

68,074

 

 

 

—

 

 

 

68,074

 

 

 

—

 

 Total financial assets

 

$

109,029

 

 

$

25,522

 

 

$

83,507

 

 

$

—

 

During the six months ended June 30, 2025, there were no transfers between fair value hierarchy levels.

When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure the fair value. In determining the fair values of cash equivalents and marketable securities at each date presented above, the Company relied on quoted prices for similar securities in active markets or using other inputs that are observable or can be corroborated by observable market data.

Derivative Financial Asset

Pursuant to the out-licensing agreement entered into with DCx on May 1, 2025 (Note 4), anti-dilution protection rights were granted to the Company by DCx under which the Company is entitled to receive additional common shares in DCx, at no cost, guaranteeing the Company's equity interest in DCx remains at 9.99% on a fully-diluted basis until such time as DCx achieves a specified funding threshold. In accordance with ASC 815, Derivatives and Hedging, the Company's anti-dilution protection rights were determined to be freestanding financial instruments that meet the definition of a derivative and have been recorded at fair value within Other Assets on the Company's Condensed Consolidated Balance Sheet, determined according to Level 3 inputs in the fair value hierarchy.

The fair value of the anti-dilution protection rights was established at $0.6 million at inception and at June 30, 2025, using a Monte Carlo simulation methodology, which expresses potential future scenarios that when simulated thousands of times, can be viewed statistically to ascertain fair value, with the initial equity value determined based on DCx's most recent round of financing and probability estimates applied based on the assumed likelihood of future financing rounds.

The Company marks-to-market its anti-dilution protection rights at each reporting period, with changes in fair value recognized in Other Income (Expense) in the Consolidated Statement of Operations and Comprehensive Loss. As at June 30, 2025, there was no change in the fair value of the anti-dilution rights.