v3.25.2
Fair Value of Financial Assets and Liabilities
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Financial Assets and Liabilities FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:
Fair Value Measurements as of June 30, 2025 Using:
(in thousands)Level 1Level 2Level 3Total
Assets:
Cash equivalents—money market funds$15,610 $— $— $15,610 
Marketable securities— U.S. Treasury notes, U.S. Treasury bills, and federal government agency notes— 23,731 — 23,731 
$15,610 $23,731 $— $39,341 
Liabilities: 
Embedded derivative liability$— $— $10 $10 
Class C warrant liability — — 283 283 
$— $— $293 $293 
Fair Value Measurements as of December 31, 2024 Using:
(in thousands)Level 1Level 2Level 3Total
Assets:
Cash equivalents—money market funds$40,983 $— $— $40,983 
Marketable securities—U.S. Treasury notes, U.S. Treasury bills, and federal government agency notes— 46,361 — 46,361 
$40,983 $46,361 $— $87,344 
Liabilities:
Embedded derivative liability$— $— $10 $10 
Class C warrant liability— — 13,755 13,755 
$— $— $13,765 $13,765 
All marketable securities are classified as short-term investments as all are due within one year and include investments in U.S. Treasury notes, U.S. Treasury bills and federal government agency notes. The amortized cost of each investment, individually and in aggregate, approximated fair value. The Company evaluated each marketable security for impairment that is other-than-temporary and concluded that no marketable security was impaired as of June 30, 2025 and December 31, 2024.
The Company’s cash equivalents consisted of money market funds invested in U.S. Treasury securities. The money market funds were valued based on quoted prices in active markets for identical assets, which represents a Level 1 measurement.
The following table provides amortized cost, unrealized gains and losses and the carrying amount of available-for-sale debt marketable securities as of June 30, 2025:
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securities$5,445 $— $3 $5,442 
Federal Government Agency securities18,305 — 16 18,289 
Total available-for-sale debt securities$23,750 $— $19 $23,731 
The following table provides amortized cost, unrealized gains and losses and the carrying amount of available-for-sale debt marketable securities as of December 31, 2024:
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securities$18,928 $5 $3 $18,930 
Federal Government Agency securities27,436 9 14 27,431 
Total available-for-sale debt securities$46,364 $14 $17 $46,361 
The following table provides a roll-forward for the six months ended June 30, 2025, of the aggregate fair values financial instruments for which fair values are determined using Level 3 inputs:
(in thousands)Embedded Derivative LiabilityClass C Warrant LiabilityTotal
Balance as of December 31, 2024$10 $13,755 $13,765 
Change in fair value— (13,472)(13,472)
Balance as of June 30, 2025
$10 $283 $293 

Valuation of Embedded Derivative Liability— The fair value of the embedded derivative liability recognized in connection with the Company’s Hercules Loan Agreement, which is associated with additional fees due to Hercules upon non-credit related events of default, was determined based on significant inputs not observable in the market, which represents a Level 3
measurement within the fair value hierarchy. The fair value of this embedded derivative liability, which is reported within other non-current liabilities on the condensed consolidated balance sheets, is estimated by the Company at each reporting date based, in part, on the results of third-party valuations, which were prepared based on a discounted cash flow model that considered the timing and probability of occurrence of a redemption upon an event of default, the potential amount of prepayment fees or contingent interest upon an event of default and the Company’s risk-adjusted discount rate of 17%. As of June 30, 2025 and December 31, 2024, the fair value of this derivative liability was $10 thousand.

Class C Warrant Liability— In December 2022, the Company issued Class C Warrants for the purchase of shares of its common stock in a public offering. The Class C Warrants are accounted for as a liability on the condensed consolidated balance sheet and are adjusted to fair value at period end through “change in fair value of warrant liability” on the condensed consolidated statements of operations and comprehensive (loss) income.
The Company calculated the fair value of the Class C Warrants using the Black-Scholes option pricing model, with the following inputs:
June 30, 2025
December 31, 2024
Common stock price$1.90$21.90
Risk-free interest rate3.7 %4.2 %
Expected term (in years)2.42.9
Expected volatility122.2 %117.5 %
Expected dividend yield— %— %