v3.26.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements

3. Fair Value Measurements

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy (in thousands):

 

 

As of December 31, 2025

 

 

Fair Value Measurement Using

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Money market funds

$

249,393

 

 

$

—

 

 

$

—

 

 

$

249,393

 

Total cash equivalents

 

249,393

 

 

 

—

 

 

 

—

 

 

 

249,393

 

Marketable securities

 

 

 

 

 

 

 

 

 

 

 

Government securities

 

—

 

 

 

45,040

 

 

 

—

 

 

 

45,040

 

Total marketable securities

 

—

 

 

 

45,040

 

 

 

—

 

 

 

45,040

 

Restricted cash

 

 

 

 

 

 

 

 

 

 

 

Certificate of deposit

 

—

 

 

 

770

 

 

 

—

 

 

 

770

 

Total restricted cash

 

—

 

 

 

770

 

 

 

—

 

 

 

770

 

Total assets

$

249,393

 

 

$

45,810

 

 

$

—

 

 

$

295,203

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Derivative liability - warrants

 

—

 

 

 

1,305

 

 

 

38

 

 

 

1,343

 

Total liabilities

$

—

 

 

$

1,305

 

 

$

38

 

 

$

1,343

 

 

 

As of December 31, 2024

 

 

Fair Value Measurement Using

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Money market funds

$

19,926

 

 

$

—

 

 

$

—

 

 

$

19,926

 

Total cash equivalents

 

19,926

 

 

 

—

 

 

 

—

 

 

 

19,926

 

Marketable securities

 

 

 

 

 

 

 

 

 

 

 

Government securities

 

—

 

 

 

5,021

 

 

 

—

 

 

 

5,021

 

Total marketable securities

 

—

 

 

 

5,021

 

 

 

—

 

 

 

5,021

 

Restricted cash

 

 

 

 

 

 

 

 

 

 

 

Certificate of deposit

 

—

 

 

 

498

 

 

 

—

 

 

 

498

 

Total restricted cash

 

—

 

 

 

498

 

 

 

—

 

 

 

498

 

Total assets

$

19,926

 

 

$

5,519

 

 

$

—

 

 

$

25,445

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Derivative liability - warrants

 

—

 

 

 

—

 

 

 

2,504

 

 

 

2,504

 

Total liabilities

$

—

 

 

$

—

 

 

$

2,504

 

 

$

2,504

 

Marketable Securities

The Company accounts for marketable securities held as “available-for-sale” in accordance with ASC 320, Investments-Debt Securities. The Company classifies these investments as current assets and carries them at fair value.

The fair value of the Company’s marketable securities classified within Level 2 is based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications.

Certificate of Deposit

The Company’s certificates of deposit are Level 2 instruments. The fair value of such instruments is estimated based on valuations obtained from third-party pricing services that utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable either directly or indirectly. These inputs include interest rate curves, foreign exchange rates, and credit ratings.

Warrants

The Company has issued warrants to investors in connection with prior equity financings. These warrants are required to be measured at fair value and presented as liabilities in the accompanying balance sheets. As of December 31, 2025, the warrant liabilities include (i) nominal exercise price warrants, which are marked-to-market based on the period-end closing price of the Company's common stock and (ii) the New Series B Warrant, which has an exercise price of $41.83 and is valued using the Black‑Scholes option pricing model, which includes unobservable inputs. The nominal exercise price warrants are classified within Level 2 of the fair value hierarchy. The New Series B Warrant is classified within Level 3. See Note 8 Redeemable Convertible Preferred Stock and Equity for additional information on the warrants.

For the years ended December 31, 2025 and 2024, the change in the fair value of the Level 3 warrant liability resulted in the recording of a gain (loss) on change in fair value of derivative instruments of $0.04 million and ($0.9) million, respectively, in the accompanying statements of operations.

The following are the assumptions used in the Black-Scholes valuation model in order to determine the fair value of the Level 3 derivative liabilities for the warrant liabilities for the years ended December 31, 2025 and 2024:

 

 

December 31,

 

 

December 31,

 

 

2025

 

 

2024

Term

 

2.66

 

 

0.58 - 2.00

Volatility

 

 

103.4

%

 

49.0% - 70.0 %

Exercise price

 

$

41.83

 

 

$ 0.28 - $41.83

Risk-free rate

 

 

3.52

%

 

4.23% - 4.25 %

 

If the significant unobservable inputs of volatility and discount rate were to change, this may result in a significantly higher or lower fair value measurement at the reporting dates. The changes in Level 3 derivative liabilities for the years ended December 31, 2025 and 2024 were as follows (in thousands):

 

 

 

Warrants

 

Balance, December 31, 2023

 

$

1,557

 

Loss due to change in fair value

 

 

947

 

Balance, December 31, 2024

 

$

2,504

 

Transfer of nominal exercise price warrants out of Level 3 into Level 2

 

 

(2,426

)

Gain due to change in fair value

 

 

(40

)

Balance, December 31, 2025

 

$

38

 

 

The change in the total warrant liabilities for the years ended December 31, 2025 and 2024 was (in thousands):

 

 

 

Warrants

 

Balance, December 31, 2023

 

$

1,557

 

Loss due to change in fair value

 

 

947

 

Balance, December 31, 2024

 

$

2,504

 

Gain due to change in fair value

 

 

(1,161

)

Balance, December 31, 2025

 

$

1,343

 

 

 

During the year ended December 31, 2025, the Company transferred certain warrant liabilities from Level 3 to Level 2 within the fair value hierarchy. Transfers between levels are recognized at the beginning of the reporting period in which the transfer occurs.

There are uncertainties on the fair value measurement of the instruments classified under Level 3 due to the use of unobservable inputs and interrelationships between these unobservable inputs, which could result in higher or lower fair value measurements.