v3.26.3
Fair Value Measurements
 9 Months Ended
Sep. 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 September 30, 2026

 

 

 

Fair Value Measurement Using

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

207,759

 

 

$

—

 

 

$

—

 

 

$

207,759

 

U.S. government securities

 

 

—

 

 

 

5,089

 

 

 

—

 

 

 

5,089

 

Corporate bonds

 

 

—

 

 

 

916

 

 

 

—

 

 

 

916

 

Total cash equivalents

 

 

207,759

 

 

 

6,005

 

 

 

—

 

 

 

213,764

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government securities

 

 

—

 

 

 

131,908

 

 

 

—

 

 

 

131,908

 

Corporate bonds

 

 

—

 

 

 

51,517

 

 

 

—

 

 

 

51,517

 

Commercial paper

 

 

—

 

 

 

5,260

 

 

 

—

 

 

 

5,260

 

Total short-term investments

 

 

—

 

 

 

188,685

 

 

 

—

 

 

 

188,685

 

Restricted cash

 

 

 

 

 

 

 

 

 

 

 

 

Certificate of deposit

 

 

—

 

 

 

788

 

 

 

—

 

 

 

788

 

Total restricted cash

 

 

—

 

 

 

788

 

 

 

—

 

 

 

788

 

Total assets

 

$

207,759

 

 

$

195,478

 

 

$

—

 

 

$

403,237

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liability – warrants

 

 

—

 

 

 

1,229

 

 

 

50

 

 

 

1,279

 

Total liabilities

 

$

—

 

 

$

1,229

 

 

$

50

 

 

$

1,279

 

 

 

 

 

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

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government securities

 

 

—

 

 

 

45,040

 

 

 

—

 

 

 

45,040

 

Total short-term investments

 

 

—

 

 

 

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

 

Short-term Investments

The Company accounts for short-term investments 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 and accrued interest on short-term investments is included within short-term investments on the condensed balance sheets.

The fair value of the Company's short-term investments 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 Level 2 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 may include interest rate curves, foreign exchange rates, and credit ratings.

Warrants

The Company has issued warrants to investors in connection with prior equity financings as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. These warrants are required to be measured at fair value and presented as liabilities in the accompanying condensed balance sheets. As of September 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 7 Equity for additional information.

For the three and nine months ended September 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 $0.3 million and $0.8 million, respectively, in the accompanying condensed statements of operations, primarily related to the nominal exercise price warrants classified within Level 2. The loss related to the New Series B Warrant classified within Level 3 was immaterial. For the three and nine months ended September 30, 2025, the change in the fair value of the warrant liabilities resulted in the recording of a gain on change in fair value of derivative instruments of $1.0 million and $1.6 million, respectively, in the accompanying condensed statements of operations. During the three and nine months ended September 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 change in the warrant liabilities for the nine months ended September 30, 2026 was (in thousands):

 

 

Warrants

 

Balance December 31, 2025

 

$

1,343

 

Exercise of warrants

 

 

(868

)

Loss due to change in fair value

 

 

804

 

Balance September 30, 2026

 

$

1,279

 

During the three and nine months ended September 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.