v3.26.1
Fair Value
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
The following fair value hierarchy tables present information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):
 Fair Value Measurement at March 31, 2026
 Fair ValueLevel 1Level 2Level 3
Assets
Money market funds$136,733 $136,733 $— $— 
Total assets at fair value$136,733 $136,733 $— $— 
 Fair Value Measurement at December 31, 2025
 Fair ValueLevel 1Level 2Level 3
Assets
Money market funds$9,244 $9,244 $— $— 
Total assets at fair value$9,244 $9,244 $— $— 
 Fair Value Measurement at March 31, 2026
Fair ValueLevel 1Level 2Level 3
Liabilities
SARs liability$2,710 $— $— $2,710 
Stock options granted subject to shares available liability1,123 — — 1,123 
Total Liabilities$3,833 $— $— $3,833 
 Fair Value Measurement at December 31, 2025
Fair ValueLevel 1Level 2Level 3
Liabilities
SARs liability$809 $— $— $809 
Total Liabilities$809 $— $— $809 
There were no transfers between Level 1, Level 2 or Level 3 assets during the periods presented.
For the Company’s money market funds which are included as a component of cash and cash equivalents on the consolidated balance sheet, realized gains and losses are included in interest income on the consolidated statements of operations.
Our money market fund account is held in our bank in the U.S. and was earning interest at a rate of 3.54% in a U.S. Government money market fund.
The Company has cash balances in banks in excess of the maximum amount insured by the FDIC and other international agencies as of March 31, 2026. The Company has not historically experienced any credit losses with balances in excess of FDIC limits.
The Company recorded a SARs liability of $2.7 million and $0.8 million and as of March 31, 2026 and December 31, 2025, respectively, as a result of the grant of up to 3.5 million SARs in July 2025 (see note 7). The fair value of the SARs liability was classified as Level 3 under the fair value hierarchy. A rollforward of the fair value of the SARs liability is as follow (in thousands)
Fair value of SARs liability at December 31, 2025$809 
Change in fair value of SARs liability1,901 
Fair value of SARs liability at March 31, 2026$2,710 
The Company utilized a Monte Carlo simulation model in conjunction with a Probability-Weighted Expected Return Model (“PWERM”) to estimate the fair value of the SARs liabilities. This valuation model incorporates various assumptions, including stock price volatility, risk-free interest rate, corporate transaction probability and the expected term of the underlying equity instruments and SARs.

The following table summarizes the key assumptions used in estimating the fair value of the SARs on March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Expected term (years)
1.08-2.96
1.00-2.40
Risk-free interest rate
3.75%-4.21%
3.64%-4.11%
Stock price volatility
80%-115%
65%-115%
Probability (1)
50%-50%
50%-50%
Dividend rate
—%
—%

(1) Scenario probability was based on timing expectations of the Company that a corporate transaction occurring was estimated at 50%; and a corporate transaction not occurring at 50%.

The Company recorded a liability for stock options granted subject to shares available of $1.1 million and $0 as of March 31, 2026 and December 31, 2025, respectively, as a result of the grant of 177,590 stock options on March 27, 2026 (see note 7). The fair value of the stock options granted subject to shareholder approval liability was classified as Level 3 under the fair value hierarchy. A rollforward of the fair value of the Stock Options issued subject to shares available liability is as follows (in thousands):
Fair value of stock options granted subject to shares available liability at December 31, 2025$— 
Stock options granted subject to shares available liability1,123 
Fair value of stock options granted subject to shares available liability at March 31, 2026$1,123 
The Company utilized a Black-Scholes valuation model to estimate the fair value of the stock options granted subject to shares available liability. This valuation model incorporates various assumptions, including stock price volatility, risk-free interest rate, and the expected term of the liability. The grant date assumptions are as follows: the risk free interest rate associated with these grants ranges from 4.06%-4.13%, volatility ranges from 110%-113%, there is no dividend and the expected term ranges from 5-5.8 years.
The carrying amounts of other current assets and prepaid expenses, accounts payable, accrued expenses, and other current liabilities approximate their fair values due to their short-term nature. The fair value and book value of the money market funds presented in the table above are the same.