v3.26.1
Fair Value Measurements and Financial Instruments
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Financial Instruments

3.

Fair Value Measurements and Financial Instruments

For a description of the fair value hierarchy and the fair value methodology, see Note 2 — Summary of Significant Accounting Policies in the Annual Report. There were no significant changes in these methodologies during the six months ended June 30, 2026. As of June 30, 2026, the Company’s highly liquid money market funds are included within cash equivalents.

The following tables present the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 (in thousands):

 

 

 

June 30, 2026

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds(1)

 

$

27,543

 

 

$

—

 

 

$

—

 

 

$

27,543

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

  Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

     US government agency securities

 

 

—

 

 

 

1,990

 

 

 

—

 

 

 

1,990

 

     Corporate debt securities

 

 

—

 

 

 

13,485

 

 

 

—

 

 

 

13,485

 

     Commercial paper

 

 

—

 

 

 

1,976

 

 

 

—

 

 

 

1,976

 

Total financial assets

 

$

27,543

 

 

$

17,451

 

 

$

—

 

 

$

44,994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability, noncurrent

 

$

—

 

 

$

—

 

 

$

2,741

 

 

$

2,741

 

Total financial liabilities

 

$

—

 

 

$

—

 

 

$

2,741

 

 

$

2,741

 

 

 

 

December 31, 2025 (As Recast)

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds(1)

 

$

25,043

 

 

$

—

 

 

$

—

 

 

$

25,043

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

  Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

     US government agency securities

 

 

—

 

 

 

2,000

 

 

 

—

 

 

 

2,000

 

     Corporate debt securities

 

 

—

 

 

 

23,146

 

 

 

—

 

 

 

23,146

 

     Commercial paper

 

 

—

 

 

 

2,939

 

 

 

—

 

 

 

2,939

 

Total financial assets

 

$

25,043

 

 

$

28,085

 

 

$

—

 

 

$

53,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability, noncurrent

 

$

—

 

 

$

—

 

 

$

2,961

 

 

$

2,961

 

Total financial liabilities

 

$

—

 

 

$

—

 

 

$

2,961

 

 

$

2,961

 

 

(1)
Included in cash and cash equivalents on the accompanying condensed consolidated balance sheets.

 

The carrying amounts of cash, accounts and note receivables, net, other receivables, accounts payable, due to related parties, and accrued liabilities approximate their fair values due to their short maturities.

Money market funds are valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. U.S. treasury securities, commercial paper, corporate debt securities and U.S. government agency securities are valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.

During the six months ended June 30, 2026 and the year ended December 31, 2025, there were no transfers of fair value measurement between Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and liabilities.

Warrant Liability

In October 2023, Catalyst entered into a Securities Purchase Agreement for a private placement with GNI USA (the “Private Placement”). Upon closing of the Private Placement, the Company issued 811 shares of Series X Convertible Preferred Stock, par value $0.001 per share (the "Series X Preferred Stock"), and 811 warrants to purchase Series X Preferred Stock (the “Preferred Stock Warrants") to GNI USA for an aggregate purchase price of approximately $5.0 million. The Preferred Stock Warrants are immediately exercisable at an exercise price of $4,915.00 per share of Series X Preferred Stock and expire on October 30, 2033. The number of shares of Common Stock, par value $0.001 per share (“common stock”), issuable upon exercise and conversion of the Preferred Stock Warrants is 540,666. The Company accounted for the Private Placement as a non-arm’s length transaction. The Preferred Stock Warrants were initially recognized at fair value upon issuance and the remaining proceeds from the Private Placement were allocated to the Series X Preferred Stock.

The Preferred Stock Warrants are freestanding financial instruments classified as a warrant liability on the Company’s condensed consolidated balance sheet. The fair value of the Preferred Stock Warrants is subject to uncertainty due to unobservable inputs, including the expected volatility of the Company’s stock price, the likelihood of warrant exercise, and the estimated term of the warrants. Since there is limited market activity for the Preferred Stock Warrants, their fair value is determined using an option pricing model, which incorporates subjective inputs such as the Company’s stock price volatility, derived from historical and peer company data, as well as management’s expectations regarding future performance. As these assumptions evolve due to market conditions or company specific factors, the warrant liability may experience fluctuations. The Preferred Stock Warrants are revalued each reporting period with the change in fair value recorded as change in fair value of warrant liability in other income, net on the consolidated statement of operations and comprehensive income.

The fair value of the warrant liability is estimated based on the Black-Scholes option-pricing model using the following weighted-average assumptions:

 

June 30, 2026

 

 

December 31, 2025 (As Recast)

 

Share price

$

6.59

 

 

$

7.06

 

Exercise price

$

4,915.00

 

 

$

4,915.00

 

Dividend yield

 

—

%

 

 

—

%

Risk-free interest

 

4.23

%

 

 

3.93

%

Term (years)

7.33

 

 

7.83

 

Expected volatility

 

84.00

%

 

 

81.00

%

The following table sets forth the changes in the estimated fair value of the Company’s Level 3 financial liabilities (in thousands):

 

 

 

Warrant liability

 

Balance at December 31, 2025 (As Recast)

 

 

$

2,961

 

Changes in fair value

 

 

 

(220

)

Balance at June 30, 2026

 

 

$

2,741

 

 

Financial Instruments

Cash equivalents, available-for-sale, and held-to-maturity debt securities consisted of the following (in thousands):

 

June 30, 2026

 

Amortized
cost

 

 

Gross
unrealized
gains

 

 

Gross
unrealized
losses

 

 

Estimated
fair
value

 

Money market funds (cash equivalents)

 

$

27,543

 

 

$

—

 

 

$

—

 

 

$

27,543

 

Short-term bank deposits

 

 

14,058

 

 

 

—

 

 

 

—

 

 

 

14,058

 

Long-term certificates of deposit

 

 

28,444

 

 

 

—

 

 

 

—

 

 

 

28,444

 

Short-term investments (available-for-sale securities)

 

 

 

 

 

 

 

 

 

 

 

 

     US government agency securities

 

 

2,000

 

 

 

—

 

 

 

(10

)

 

 

1,990

 

     Corporate debt securities

 

 

13,351

 

 

 

134

 

 

 

—

 

 

 

13,485

 

     Commercial paper

 

 

1,978

 

 

 

—

 

 

 

(2

)

 

 

1,976

 

Total financial assets

 

$

87,374

 

 

$

134

 

 

$

(12

)

 

$

87,496

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

$

27,543

 

Short-term bank deposits

 

 

 

 

 

 

 

 

 

 

 

14,058

 

Long-term certificates of deposit

 

 

 

 

 

 

 

 

 

 

 

28,444

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

17,451

 

Total financial assets

 

 

 

 

 

 

 

 

 

 

$

87,496

 

 

December 31, 2025 (As Recast)

 

Amortized
cost

 

 

Gross
unrealized
gains

 

 

Gross
unrealized
losses

 

 

Estimated
fair
value

 

Money market funds (cash equivalents)

 

$

25,043

 

 

$

—

 

 

$

—

 

 

$

25,043

 

Short-term bank deposits

 

 

15,355

 

 

 

—

 

 

 

—

 

 

 

15,355

 

Long-term certificates of deposit

 

 

23,516

 

 

 

—

 

 

 

—

 

 

 

23,516

 

Short-term investments (available-for-sale securities)

 

 

 

 

 

 

 

 

 

 

 

 

     US government agency securities

 

 

2,000

 

 

 

—

 

 

 

—

 

 

 

2,000

 

     Corporate debt securities

 

 

22,866

 

 

 

280

 

 

 

—

 

 

 

23,146

 

     Commercial paper

 

 

2,939

 

 

 

—

 

 

 

—

 

 

 

2,939

 

Total financial assets

 

$

91,719

 

 

$

280

 

 

$

—

 

 

$

91,999

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

$

25,043

 

Short-term bank deposits

 

 

 

 

 

 

 

 

 

 

 

15,355

 

Long-term certificates of deposit

 

 

 

 

 

 

 

 

 

 

 

23,516

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

28,085

 

Total financial assets

 

 

 

 

 

 

 

 

 

 

$

91,999

 

 

The fair value and amortized cost of the Company's held-to-maturity debt securities by redemption date were as follows:

 

 

 

June 30, 2026

 

 

 

Amortized Cost

 

 

Fair Value

 

Due in one year

 

$

14,058

 

 

$

14,058

 

Due in one to five years

 

 

28,444

 

 

 

28,444

 

Total

 

$

42,502

 

 

$

42,502

 

 

Interest income from the short-term bank deposits is recognized on an accrual basis over the term of the deposits. The accrued interest income for the three months ended June 30, 2026 and 2025 was $0.1 million and $0.1 million, respectively. The accrued interest income for the six months ended June 30, 2026 and 2025 was $0.2 million and $0.3 million, respectively.

Interest income from the long-term certificates of deposit is recognized on an accrual basis over the term of the deposits. The accrued interest income for the three months ended June 30, 2026 and 2025 was $0.2 million and $0.2 million, respectively. The accrued interest income for the six months ended June 30, 2026 and 2025 was $0.3 million and $0.3 million, respectively.