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

3. Fair Value Measurements

The Company’s financial assets and financial liabilities recognized at fair value consisted of the following (in thousands):

 

 

June 30, 2026

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

35,508

 

 

$

—

 

 

$

—

 

 

$

35,508

 

U.S. treasury securities

 

 

—

 

 

 

7,423

 

 

 

—

 

 

$

7,423

 

Total financial Assets

 

$

35,508

 

 

$

7,423

 

 

$

—

 

 

$

42,931

 

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Convertible note

 

$

—

 

 

$

—

 

 

$

37,799

 

 

$

37,799

 

Total financial liabilities

 

$

—

 

 

$

—

 

 

$

37,799

 

 

$

37,799

 

 

 

 

December 31, 2025

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

12,695

 

 

$

—

 

 

$

—

 

 

$

12,695

 

U.S. treasury securities

 

 

—

 

 

 

45,167

 

 

 

—

 

 

 

45,167

 

Total financial Assets

 

$

12,695

 

 

$

45,167

 

 

$

—

 

 

$

57,862

 

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Convertible note

 

$

—

 

 

$

—

 

 

$

35,339

 

 

$

35,339

 

Total financial liabilities

 

$

—

 

 

$

—

 

 

$

35,339

 

 

$

35,339

 

 

The Company’s securities are valued using third-party pricing services or other observable market data. The pricing services utilize industry standard valuation models and observable market inputs to determine value. There have been no transfers within the hierarchies during the six months ended June 30, 2026.

The Company elected to measure the convertible note (Note 8) at fair value with changes in fair value reported in earnings as they occur. The convertible note fair value was determined using the discounted cash flows methodology based on probability weighted scenarios of the convertible note's conversion using Level 3 inputs not observable in the market. A significant increase (decrease) in these inputs would result in a lower (higher) fair value measurement. At issuance on May 11, 2023, the time to a conversion event ranged from 0.22 to 0.39 years and the discount rate applied was 29.1%. On December 31, 2025, the time to event ranged from 0.25 to 0.36 years, and the discount rate applied was 27.55%. The convertible note matured on May 11, 2026.

The following table provides a reconciliation of the beginning and ending balances of the convertible note fair value for the three and six months ended June 30, 2026 (in thousands):

 

 

Three months ended
June 30, 2026

 

 

Six Months Ended
June 30, 2026

 

 

(in thousands)

 

 

(in thousands)

 

Fair value at the beginning of the period

 

$

40,546

 

 

$

35,339

 

Accrued stated interest

 

 

276

 

 

 

875

 

Change in fair value

 

 

(3,023

)

 

 

1,585

 

Fair value at end of period

 

$

37,799

 

 

$

37,799