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

Note 6. Fair Value of Financial Instruments

In connection with the Acquisition, the Company pays royalty on U.S. net sales of SUNOSI to Jazz. The discounted cash flow method used to value this contingent consideration includes inputs of not readily observable market data, which are Level 3 inputs. The fair value of the contingent consideration is reflected as current accrued contingent consideration of $11.2 million and non-current contingent consideration liability of $69.1 million in the consolidated balance sheet as of June 30, 2026.

The fair value of financial instruments measured on a recurring basis is as follows:

 

 

June 30, 2026

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - money market funds

 

$

155,545

 

 

$

—

 

 

$

—

 

 

$

155,545

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

—

 

 

$

—

 

 

$

80,334

 

 

$

80,334

 

 

 

 

December 31, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - money market funds

 

$

173,111

 

 

$

—

 

 

$

—

 

 

$

173,111

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

—

 

 

$

—

 

 

$

87,552

 

 

$

87,552

 

Contingent Consideration Liabilities

The fair value of the contingent consideration liabilities is marked-to-market at each reporting period and was remeasured at June 30, 2026. Changes in fair value of the contingent consideration liabilities as of June 30, 2026 are as follows:

 

 

Contingent consideration

 

Balance at December 31, 2025

 

$

87,552

 

Adjustment to fair value

 

 

(906

)

Payments

 

 

(6,312

)

Balance at June 30, 2026 (Level 3)

 

$

80,334