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

3. Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurement establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.

The Company determined the fair value of financial assets and liabilities using the fair value hierarchy that describes three levels of inputs that may be used to measure fair value, as follows:

Level 1 — Quoted prices in active markets for identical assets and liabilities;

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company classifies money market funds as Level 1 instruments as the Company uses quoted prices in active markets for identical assets to determine the fair value.

The following table summarizes the Company's financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

 

 

March 31, 2026

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

45,618

 

 

$

45,618

 

 

$

—

 

 

$

—

 

Total

 

$

45,618

 

 

$

45,618

 

 

$

—

 

 

$

—

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

$

3,938

 

 

$

—

 

 

$

—

 

 

$

3,938

 

Total

 

$

3,938

 

 

$

—

 

 

$

—

 

 

$

3,938

 

 

 

 

December 31, 2025

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

48,458

 

 

$

48,458

 

 

$

—

 

 

$

—

 

Total

 

$

48,458

 

 

$

48,458

 

 

$

—

 

 

$

—

 

The Company did not have any financial liabilities recorded at fair value as of December 31, 2025.

Debt

The gross amount of debt approximates its fair value as of March 31, 2026 as the debt bears interest at a variable rate that includes a component based on the prime rate, which is a market-observable rate. As a result, the stated coupon rate is consistent with current market rates for similar instruments and therefore the carrying amount is considered to approximate fair value.

Warrant and Conversion Option Liabilities

The Company classified its warrant and conversion option liabilities as Level 3 instruments as they were valued using the Monte Carlo Method. See Note 6 “Debt” for further information.