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Financial Instruments and Fair Value Measurements | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
Financial Instruments and Fair Value Measurements | 4. Financial Instruments and Fair Value Measurements The following tables present the Company’s fair value hierarchy for its assets and liabilities that are measured at fair value on a recurring basis:
|  | Fair Value Measurements at |
|  | September 30, 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets |  | (in thousands) |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market fund |  | $ | 29,726 |  |  | $ | — |  |  | $ | — |  |  | $ | 29,726 |
Restricted cash: |  |  |  |  |  |  |  |  |  |  |  |
Money market fund |  |  | 100 |  |  |  | — |  |  |  | — |  |  |  | 100 |
Short-term investments |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bills |  |  | 190,202 |  |  |  | — |  |  |  | — |  |  |  | 190,202 |
Long-term investments |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury notes |  |  | 45,328 |  |  |  | — |  |  |  | — |  |  |  | 45,328 |
Total assets |  | $ | 265,356 |  |  | $ | — |  |  | $ | — |  |  | $ | 265,356 |
|  | Fair Value Measurements at |
|  | December 31, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets |  | (in thousands) |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market fund |  | $ | 27,107 |  |  | $ | — |  |  | $ | — |  |  | $ | 27,107 |
Restricted cash: |  |  |  |  |  |  |  |  |  |  |  |
Money market fund |  |  | 100 |  |  |  | — |  |  |  | — |  |  |  | 100 |
Short-term investments |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bills |  |  | 73,143 |  |  |  | — |  |  |  | — |  |  |  | 73,143 |
Total assets |  | $ | 100,350 |  |  | $ | — |  |  | $ | — |  |  | $ | 100,350 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Series C warrant liabilities |  | $ | — |  |  | $ | — |  |  | $ | 9,935 |  |  | $ | 9,935 |
Common B warrant liabilities |  |  | — |  |  |  | — |  |  |  | 34,963 |  |  |  | 34,963 |
Total liabilities |  | $ | — |  |  | $ | — |  |  | $ | 44,898 |  |  | $ | 44,898 |
Money market funds and U.S. Treasury bills were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. There were no changes to the valuation methods during the nine months ended September 30, 2025 and 2024. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers between Level 1 or Level 2 during the nine months ended September 30, 2025 and 2024. Warrant Liabilities In connection with the August 2023 Series D Preferred Stock financing, the Company granted warrants to purchase up to 4,302,009 shares of Class B common stock equal to 70% of the shares of Series D Preferred Stock purchased by the purchaser at an exercise price of $0.02 per share and expire on the earliest to occur of (i) August 28, 2033, (ii) immediately prior to the sale of the Company or a transaction that qualifies as a Deemed Liquidation Event (as defined in the Company’s certificate of incorporation) or (iii) immediately prior to the consummation of a qualifying initial public offering or a SPAC Transaction (as defined in the Company’s certificate of incorporation). The Common B warrants were initially recorded as a liability as they represent freestanding financial instruments that were not indexed to the Company’s common stock and were required to be remeasured to fair value at each reporting date. Additionally, the Common B warrants did not meet the definition of a derivative. In connection with the February 2022 Series C Preferred Stock financing, the Company granted warrants to purchase up to 520,490 shares of Series C Preferred Stock at a price per share equal to $0.02 and with a term ending on the earliest to occur of (i) February 16, 2032, (ii) immediately prior to the sale of the Company or a transaction that qualifies as a Deemed Liquidation Event or (iii) immediately prior to the consummation of a qualifying initial public offering or a SPAC Transaction. As the warrants were exercisable for preferred stock that was contingently redeemable outside of the Company’s control, the warrants were initially recorded as a liability and were required to be remeasured to fair value at each reporting date. As there are significant inputs that were not observable in the market, the warrant valuations represent a Level 3 measurement within the fair value hierarchy. The Company’s valuations of the preferred stock and Common B warrants utilized the Black-Scholes option pricing model, which incorporated assumptions and estimates to value the preferred stock and Common B warrant. The quantitative elements associated with the Company’s Level 3 inputs impacting the fair value measurement of the preferred stock and common stock warrant liabilities included the fair value per share of the underlying stock, expected volatility of the price of the underlying stock, the remaining contractual term of the warrant, risk-free interest rate, and expected dividend yield. The most significant assumption in the Black-Scholes option pricing model impacting the fair value of the preferred stock and common stock warrant liabilities was the fair value of the Company’s Series C Preferred Stock and Class B common stock as of each remeasurement date. The Company determined the fair value per share of the underlying preferred stock by taking into consideration its most recent sales of its convertible preferred stock. Further, the Board valued the Company’s Class B common stock taking into consideration the most recent sales of the Company’s preferred stock, results obtained from third-party valuations and additional factors the Company deemed relevant and which may have changed since the date of the most recent valuation through the effective date of the warrant. The Company historically had been a private company and lacked company-specific historical and implied volatility information of its stock. Therefore, it estimated the expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrant. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrant. The Company had estimated a 0% dividend yield based on the expected dividend yield and the fact that the Company had never paid or declared dividends. The following table presents the assumptions used in the Black-Scholes option pricing model to determine the fair value of the preferred stock warrant liabilities as of December 31, 2024:
|  | December 31, 2024 |
Fair value of Series C Preferred Stock |  | $ | 19.11 |
Strike price |  | $ | 0.02 |
Risk-free interest rate |  |  | 4.39 | %
Expected term (in years) |  |  | 0.38 |
Expected volatility |  |  | 65.00 | %
Expected dividend yield |  |  | 0 | %
The following table presents the assumptions used in the Black-Scholes option pricing model to determine the fair value of the common stock warrant liabilities as of December 31, 2024:
|  | December 31, 2024 |
Fair value of Class B common stock |  | $ | 13.08 |
Strike price |  | $ | 0.02 |
Risk-free interest rate |  |  | 4.53 | %
Expected term (in years) |  |  | 8.70 |
Expected volatility |  |  | 75.77 | %
Expected dividend yield |  |  | 0 | %
The Company recognizes changes in the fair value of the warrant liabilities as a component of other income (expense) in its statements of operations and comprehensive loss. The Company recognized changes in the fair value of the warrant liabilities through December 31 2024, and up until immediately prior to the net exercise of the warrants, which took place concurrently with the IPO on January 31, 2025 (see Note 1). Upon the closing of the IPO, the Company revalued the convertible preferred stock warrants and common stock warrants and reclassified the liability to stockholders’ equity (deficit). As the warrants were net exercised at the IPO, they are no longer outstanding. A reconciliation of the Level 3 warrant liabilities is as follows:
|  | Series C Warrant Liability |
|  | (in thousands) |
Balance at December 31, 2024 |  | $ | 9,935 |
Change in fair value |  |  | 1,929 |
Net exercise and conversion into common stock upon closing of IPO |  |  | (11,864 | )
Balance at September 30, 2025 |  | $ | — |
|  | Common B Warrant Liability |
|  | (in thousands) |
Balance at December 31, 2024 |  | $ | 34,963 |
Change in fair value |  |  | 10,521 |
Net exercise and conversion into common stock upon closing of IPO |  |  | (45,484 | )
Balance at September 30, 2025 |  | $ | — |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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