v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

5. FAIR VALUE MEASUREMENTS

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):

 

 

Fair value measurements as of June 30, 2026

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

    Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

      Money market funds

 

$

24,389

 

 

$

—

 

 

$

—

 

 

$

24,389

 

    Marketable Securities:

 

 

 

 

 

 

 

 

 

 

 

 

     Commercial paper

 

 

—

 

 

 

142,049

 

 

 

—

 

 

 

142,049

 

     Corporate bonds

 

 

—

 

 

 

17,489

 

 

 

—

 

 

 

17,489

 

Total

 

$

24,389

 

 

$

159,538

 

 

$

-

 

 

$

183,927

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock warrant liability

 

$

-

 

 

$

-

 

 

$

1

 

 

$

1

 

Total financial liabilities

 

$

-

 

 

$

-

 

 

$

1

 

 

$

1

 

 

 

 

Fair value measurements as of December 31, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

    Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

      Money market funds

 

$

7,896

 

 

$

—

 

 

$

—

 

 

$

7,896

 

    Marketable Securities:

 

 

 

 

 

 

 

 

 

 

 

 

     Commercial paper

 

 

—

 

 

 

9,772

 

 

 

—

 

 

 

9,772

 

     Corporate bonds

 

 

—

 

 

 

2,744

 

 

 

—

 

 

 

2,744

 

Total

 

$

7,896

 

 

$

12,516

 

 

$

—

 

 

$

20,412

 

When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure fair value. The valuation technique used to measure fair value for the Company's Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, the Company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument.

There were no transfers among Level 1, Level 2 or Level 3 categories in the six months ended June 30, 2026 and 2025.

Preferred Stock Warrant Liability

In September 2021, Faeth issued 10,550 warrants (the “Warrants”) to Western Alliance Bank (“Western Alliance”) to purchase shares of redeemable convertible Preferred Stock, at an exercise price of $1.42177. Western Alliance can exercise the Warrants until the termination of the agreement on September 6, 2031. Under the terms of the Merger Agreement, the Warrants were converted into warrants to purchase 2.1020 shares of Series B Preferred Stock. No Warrants were exercised as of June 30, 2026.

The Company concluded that the Warrants required liability classification based on the guidance in ASC 480. The Warrants were recorded at fair value using the Black-Scholes method with the following inputs:

 

 

For the six months
ended June 30,

 

 

2026

 

Expected equity volatility

 

60

%

Risk-free interest rate

 

3.54

%

Expected term (years)

1.5

 

 

 

 

 

The following table presents a roll-forward of the aggregate fair values of the Preferred Stock Warrant Liability (in thousands):

 

 

 

Preferred Stock Warrant Liability

 

Balance as of February 17, 2026

$

1

 

Change in fair value

 

 

 

-

 

Balance as of June 30, 2026

$

1