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Fair Value Measurements and Financial Instruments
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Financial Instruments

3.

Fair Value Measurements and Financial Instruments

 

For a description of the fair value hierarchy and the Company’s fair value methodology, see Note 2 — Summary of Significant Accounting Policies in the Annual Report. There were no significant changes in these methodologies during the six months ended June 30, 2025. As of June 30, 2025, the Company’s highly liquid money market funds are included within cash equivalents.

The following tables present the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024 (in thousands):

 

 

 

June 30, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds(1)

 

$

28,645

 

 

$

—

 

 

$

—

 

 

$

28,645

 

Total financial assets

 

$

28,645

 

 

$

—

 

 

$

—

 

 

$

28,645

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability, noncurrent

 

 

—

 

 

 

—

 

 

 

3,201

 

 

 

3,201

 

Total financial liabilities

 

$

—

 

 

$

—

 

 

$

3,201

 

 

$

3,201

 

 

 

 

December 31, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds(1)

 

$

3,300

 

 

$

—

 

 

$

—

 

 

$

3,300

 

Receivable from GCBP

 

 

—

 

 

 

—

 

 

 

4,961

 

 

 

4,961

 

Total financial assets

 

$

3,300

 

 

$

—

 

 

$

4,961

 

 

$

8,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

CVR derivative liability

 

$

—

 

 

$

—

 

 

$

4,961

 

 

$

4,961

 

Warrant liability, noncurrent

 

 

—

 

 

 

—

 

 

 

5,668

 

 

 

5,668

 

Total financial liabilities

 

$

—

 

 

$

—

 

 

$

10,629

 

 

$

10,629

 

 

 

(1)
Included in cash and cash equivalents on the accompanying condensed consolidated balance sheets.

The carrying amounts of cash, accounts and note receivables, net, other receivables, accounts payable, due to related parties, CVR excess closing cash payable, and accrued liabilities approximate their fair values due to the short maturities.

During the six months ended June 30, 2025 and the year ended December 31, 2024, there were no transfers of fair value measurement between Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and liabilities. As of June 30, 2025, the Company had fully settled the CVR liability and collected all outstanding amounts related to CVR receivables.

Warrant Liability

In October 2023, Catalyst entered into a Securities Purchase Agreement for a private placement with GNI USA (the “Private Placement”). The Private Placement closed immediately following the Contributions, on October 30, 2023. Upon closing of the Private Placement, the Company issued 811 shares of Series X Convertible Preferred Stock, par value $0.001 per share (the “Convertible Preferred Stock”), and 811 warrants to purchase Convertible Preferred Stock (the “Preferred Stock Warrants”) to purchase shares of Convertible Preferred Stock to GNI for an aggregate purchase price of approximately $5.0 million. The Preferred Stock Warrants are immediately exercisable at an exercise price of $4,915.00 per share of Convertible Preferred Stock and expire on October 30, 2033. The number of shares of common stock, par value $0.001 per share (“common stock”), issuable upon exercise and conversion of the Preferred Stock Warrants is 540,666. The Company accounted for the Private Placement as a non-arm’s length transaction. The Preferred Stock Warrants were initially recognized at fair value upon issuance and the remaining proceeds from the Private Placement were allocated to the Convertible Preferred Stock.

 

The Preferred Stock Warrants are freestanding financial instruments classified as a warrant liability on the Company’s condensed consolidated balance sheet. The fair value of the Preferred Stock Warrants is subject to uncertainty due to unobservable inputs, including the expected volatility of the Company’s stock price, the likelihood of warrant exercise, and the estimated term of the warrants. Since there is limited market activity for the Preferred Stock Warrants, their fair value is determined using an option pricing model, which incorporates subjective inputs such as the Company’s stock price volatility, derived from historical and peer company data, as well as management’s expectations regarding future performance. As these assumptions evolve due to market conditions or company specific factors, the warrant liability may experience fluctuations. The Preferred Stock Warrants are revalued each reporting period with the change in fair value recorded as change in fair value of warrant liability in other income, net on the consolidated statement of operations and comprehensive income.

The fair value of the warrant liability is estimated based on the Black-Scholes option pricing model using the following weighted-average assumptions:

 

June 30, 2025

 

 

December 31, 2024

 

Share price

$

7.35

 

 

$

12.10

 

Exercise price

$

4,915.00

 

 

$

4,915.00

 

Dividend yield

 

—

%

 

 

—

%

Risk-free interest

 

4.01

%

 

 

4.54

%

Term (years)

8.33

 

 

8.83

 

Expected volatility

 

83.00

%

 

 

83.00

%

 

The following table sets forth the changes in the estimated fair value of the Company’s Level 3 financial assets and liabilities (in thousands):

 

 

Receivable

 

 

CVR derivative

 

 

Warrant

 

 

 

from GCBP

 

 

liability

 

 

liability

 

Balance at December 31, 2024

 

$

4,961

 

 

$

4,961

 

 

$

5,668

 

Changes in fair value

 

 

39

 

 

 

39

 

 

 

(2,467

)

Change due to settlements

 

 

(5,000

)

 

 

(5,000

)

 

 

—

 

Balance at June 30, 2025

 

$

—

 

 

$

—

 

 

$

3,201

 
Financial Instruments

Cash equivalents and held-to-maturity debt securities consisted of the following (in thousands):

 

June 30, 2025

 

Amortized
cost

 

 

Gross
unrealized
gains

 

 

Gross
unrealized
losses

 

 

Estimated
fair
value

 

Money market funds (cash equivalents)

 

$

28,645

 

 

$

—

 

 

$

—

 

 

$

28,645

 

Short-term bank deposits

 

 

17,874

 

 

 

—

 

 

 

—

 

 

 

17,874

 

Long-term certificates of deposit

 

 

21,528

 

 

 

—

 

 

 

—

 

 

 

21,528

 

Total financial assets

 

$

68,047

 

 

$

—

 

 

$

—

 

 

$

68,047

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

$

28,645

 

Short-term bank deposits

 

 

 

 

 

 

 

 

 

 

 

17,874

 

Long-term certificates of deposit

 

 

 

 

 

 

 

 

 

 

 

21,528

 

Total financial assets

 

 

 

 

 

 

 

 

 

 

$

68,047

 

 

December 31, 2024

 

Amortized
cost

 

 

Gross
unrealized
gains

 

 

Gross
unrealized
losses

 

 

Estimated
fair
value

 

Money market funds (cash equivalents)

 

$

3,300

 

 

$

—

 

 

$

—

 

 

$

3,300

 

Short-term bank deposits

 

 

14,858

 

 

 

—

 

 

 

—

 

 

 

14,858

 

Long-term certificates of deposit

 

 

24,568

 

 

 

—

 

 

 

—

 

 

 

24,568

 

Total financial assets

 

$

42,726

 

 

$

—

 

 

$

—

 

 

$

42,726

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

$

3,300

 

Short-term bank deposits

 

 

 

 

 

 

 

 

 

 

 

14,858

 

Long-term certificates of deposit

 

 

 

 

 

 

 

 

 

 

 

24,568

 

Total financial assets

 

 

 

 

 

 

 

 

 

 

$

42,726

 

 

The fair value and amortized cost of the Company's held-to-maturity debt securities and redemption date were as follows:

 

 

 

June 30, 2025

 

 

 

Amortized Cost

 

 

Fair Value

 

Due in one year

 

$

17,874

 

 

$

17,874

 

Due in one to five years

 

 

21,528

 

 

 

21,528

 

Total

 

$

39,402

 

 

$

39,402

 

 

Interest income from the short-term bank deposits is recognized on an accrual basis over the term of the deposits. The accrued interest income from short-term bank deposits for the three months ended June 30, 2025 and 2024 was $0.1 million and $0.1 million, respectively. The accrued interest income from short-term bank deposits for the six months ended June 30, 2025 and 2024 was $0.3 million and $0.2 million, respectively.

 

Interest income from the long-term certificates of deposit is recognized on an accrual basis over the term of the deposits. The accrued interest income from the long-term certificates of deposit for the three months ended June 30, 2025 and 2024 was $0.2 million and $0.2 million, respectively. The accrued interest income from the long-term certificates of deposit for the six months ended June 30, 2025 and 2024 was $0.3 million and $0.3 million, respectively.