FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS |
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| FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS | 7. FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS The carrying values of cash equivalents, accounts receivable, prepaid and other current assets, and accounts payable on the Company’s Consolidated Balance Sheets approximated their fair values as of December 31, 2025 and 2024 due to their short-term nature. The carrying values of the Company’s current credit facility approximated its fair value as of December 31, 2025 and 2024 due to its variable interest rate. The carrying value of the Company’s notes receivable approximated its fair value as of December 31, 2025 and 2024 due to its variable interest rate. The Perceptive First Amendment (as defined below) included contingently issuable warrants of up to 900,000 shares that did not meet equity classification. Accordingly, the Company classified the warrants as a liability at their fair value and will adjust the warrants to their fair value at each reporting period. At December 31, 2025 the fair value of the liability-classified warrants was de minimis. Certain of the Company’s financial instruments are measured at fair value using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1:Inputs are quoted prices for identical instruments in active markets. Level 2: Inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable.
The following tables set forth the carrying amounts and fair values of the Company’s financial instruments as December 31, 2025 and 2024 (in thousands):
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