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

3. Fair Value Measurements

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy (in thousands):

 

 

 

As of June 30, 2026

 

 

 

Fair Value Measurement Using

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

279,436

 

 

$

—

 

 

$

—

 

 

$

279,436

 

Total cash equivalents

 

 

279,436

 

 

 

—

 

 

 

—

 

 

 

279,436

 

Marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

Government securities

 

 

—

 

 

 

44,679

 

 

 

—

 

 

 

44,679

 

Total marketable securities

 

 

—

 

 

 

44,679

 

 

 

—

 

 

 

44,679

 

Restricted cash

 

 

 

 

 

 

 

 

 

 

 

 

Certificate of deposit

 

 

—

 

 

 

782

 

 

 

—

 

 

 

782

 

Total restricted cash

 

 

—

 

 

 

782

 

 

 

—

 

 

 

782

 

Total assets

 

$

279,436

 

 

$

45,461

 

 

$

—

 

 

$

324,897

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liability – warrants

 

 

—

 

 

 

1,357

 

 

 

51

 

 

 

1,408

 

Total liabilities

 

$

—

 

 

$

1,357

 

 

$

51

 

 

$

1,408

 

 

 

 

As of December 31, 2025

 

 

 

Fair Value Measurement Using

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

249,393

 

 

$

—

 

 

$

—

 

 

$

249,393

 

Total cash equivalents

 

 

249,393

 

 

 

—

 

 

 

—

 

 

 

249,393

 

Marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

Government securities

 

 

—

 

 

 

45,040

 

 

 

—

 

 

 

45,040

 

Total marketable securities

 

 

—

 

 

 

45,040

 

 

 

—

 

 

 

45,040

 

Restricted cash

 

 

 

 

 

 

 

 

 

 

 

 

Certificate of deposit

 

 

—

 

 

 

770

 

 

 

—

 

 

 

770

 

Total restricted cash

 

 

—

 

 

 

770

 

 

 

—

 

 

 

770

 

Total assets

 

$

249,393

 

 

$

45,810

 

 

$

—

 

 

$

295,203

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liability – warrants

 

 

—

 

 

 

1,305

 

 

 

38

 

 

 

1,343

 

Total liabilities

 

$

—

 

 

$

1,305

 

 

$

38

 

 

$

1,343

 

 

Marketable Securities

The Company accounts for marketable securities held as “available-for-sale” in accordance with ASC 320, Investments-Debt Securities. The Company classifies these investments as current assets and carries them at fair value.

The fair value of the Company's marketable securities classified within Level 2 is based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications.

Certificate of Deposit

The Company’s certificates of deposit are Level 2 instruments. The fair value of such instruments is estimated based on valuations obtained from third-party pricing services that utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable either directly or indirectly. These inputs include interest rate curves, foreign exchange rates, and credit ratings.

Warrants

The Company has issued warrants to investors in connection with prior equity financings. These warrants are required to be measured at fair value and presented as liabilities in the accompanying condensed balance sheets. As of June 30, 2026, the warrant liabilities include (i) nominal exercise price warrants, which are marked-to-market based on the period-end closing price of the Company's common stock and (ii) the New Series B Warrant, which has an exercise price of $41.83 and is valued using the Black-Scholes option pricing model, which includes unobservable inputs. The nominal exercise price warrants are classified within Level 2 of the fair value hierarchy. The New Series B Warrant is classified within Level 3. See Note 8 Equity for additional information.

For the three and six months ended June 30, 2026, the change in the fair value of the warrant liabilities resulted in the recording of a loss on change in fair value of derivative instruments of $0.7 million and $0.5 million, respectively, in the accompanying condensed statements of operations, consisting of $0.7 million and $0.5 million, respectively, related to the nominal exercise price warrants classified within Level 2 and less than $0.02 million for both periods related to the New Series B Warrant classified within Level 3. For the three and six months ended June 30, 2025, the change in the fair value of the warrant liabilities resulted in the recording of a loss on change in fair value of derivative instruments of $0.2 million and a gain of $0.6 million, respectively, in the accompanying condensed statements of operations. During the three and six months ended June 30, 2025, all warrant liabilities were classified within Level 3 of the fair value hierarchy. During the year ended December 31, 2025, the Company transferred the nominal exercise price warrants from Level 3 to Level 2 within the fair value hierarchy as the warrants became mark-to-market instruments based on the period-end closing price of the Company's common stock following the IPO. Transfers between levels are recognized at the beginning of the reporting period in which the transfer occurs.

The following are the assumptions used in the Black-Scholes valuation model in order to determine the fair value of the warrant liabilities as of June 30, 2026 and December 31, 2025:

 

 

June 30, 2026

 

 

December 31, 2025

 

Term (in years)

 

2.16 - 2.41

 

 

 

2.66

 

Volatility

 

91.7% - 94.3%

 

 

 

103.4

%

Exercise price

 

$

41.83

 

 

$

41.83

 

Risk-free rate

 

3.47% - 4.14%

 

 

 

3.52

%

Changes in one or more significant unobservable inputs used in the valuation may result in a significantly higher or lower fair value measurement at the reporting dates. The change in the Level 3 warrant liabilities for the six months ended June 30, 2026 was (in thousands):

 

 

Level 3 Warrant Liabilities

 

Balance December 31, 2025

 

$

38

 

Exercise of warrants

 

 

(1

)

Loss due to change in fair value

 

 

14

 

Balance June 30, 2026

 

$

51

 

 

The change in the warrant liabilities for the six months ended June 30, 2026 was (in thousands):

 

 

Warrants

 

Balance December 31, 2025

 

$

1,343

 

Exercise of warrants

 

 

(397

)

Loss due to change in fair value

 

 

462

 

Balance June 30, 2026

 

$

1,408

 

During the three and six months ended June 30, 2026, there were no transfers of instruments between Level 1, 2 and 3 in the fair value hierarchy.

There are uncertainties on the fair value measurement of the instruments classified under Level 3 due to the use of unobservable inputs and interrelationships between these unobservable inputs, which could result in higher or lower fair value measurements.