v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements
4.
Fair value measurements

Carrying amounts of certain of the Company’s financial instruments, including accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued liabilities approximate fair value due to their relatively short maturities.

On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including the Company’s cash equivalents. There were no transfers between levels during the three months ended March 31, 2026 and 2025. The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 based on the three-tier fair value hierarchy (in thousands):

 

 

 

Fair Value at March 31, 2026

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial assets included within cash and cash
   equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

 

 

51,182

 

 

 

 

—

 

 

 

 

—

 

 

 

 

51,182

 

Total assets at fair value

 

$

 

51,182

 

 

$

 

—

 

 

$

 

—

 

 

$

 

51,182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liabilities

 

$

 

—

 

 

$

 

—

 

 

$

 

331

 

 

$

 

331

 

Convertible notes

 

 

 

—

 

 

 

 

—

 

 

 

 

65,094

 

 

 

 

65,094

 

Phantom stock options

 

 

 

—

 

 

 

 

—

 

 

 

 

14

 

 

 

 

14

 

Total liabilities at fair value

 

$

 

—

 

 

$

 

—

 

 

$

 

65,439

 

 

$

 

65,439

 

 

The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 based on the three-tier fair value hierarchy (in thousands):

 

 

 

Fair Value at December 31, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial assets included within cash and cash
   equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

 

19,665

 

 

$

 

—

 

 

$

 

—

 

 

$

 

19,665

 

Total assets at fair value

 

$

 

19,665

 

 

$

 

—

 

 

$

 

—

 

 

$

 

19,665

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liabilities

 

$

 

—

 

 

$

 

—

 

 

$

 

247

 

 

$

 

247

 

Phantom stock options

 

 

 

—

 

 

 

 

—

 

 

 

 

8

 

 

 

 

8

 

Total liabilities at fair value

 

$

 

—

 

 

$

 

—

 

 

$

 

255

 

 

$

 

255

 

 

Warrant liabilities

The Company issued warrants to purchase shares of its convertible preferred stock, which did not meet the criteria for equity classification and are therefore classified as a liability. The estimated fair value of the convertible preferred stock warrant liability as of March 31, 2026 and 2025 was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

There were no material changes in the fair value of the Company’s warrant liabilities in the three months ended March 31, 2026 and 2025.

Convertible notes

As of March 31, 2026, the total estimated fair value of the convertible notes issued in January 2026 was $65.1 million. The fair value was determined based on a probability-weighted approach assuming the notes settled through an automatic conversion either upon an IPO or upon maturity. The value in an IPO scenario is directly calculated based on contractual terms. The fair value of the shares received upon conversion upon maturity is determined using an option pricing model to allocate the equity value of the Company to each class of security. The inputs to this calculation included the Company's volatility which is a significant unobservable input and results in this calculation being considered a Level 3 measurement within the fair value hierarchy. As of March 31, 2026, the assumed volatility was 68.5%. Refer to Note 7—Financing Arrangements for additional terms of the convertible notes.

The following table summarizes the changes in carrying value of the convertible notes for the three months ended March 31, 2026:

 

 

 

Three Months Ended March 31,

 

 

 

2026

 

Balance at beginning of period

 

$

—

 

Issuance of convertible notes

 

 

56,500

 

Remeasurement of notes to fair value

 

 

8,594

 

Balance at end of period

 

$

65,094