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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 3. Fair Value Measurements The Company's assets and liabilities which are measured at fair value include short-term investments, the promissory note and warrants for common stock. All assets and liabilities recorded at fair value are revalued at each measurement period. The Company elected the fair value option for the promissory note and estimated the fair value based on a discounted cash flow analysis, a form of the Income Approach. Several different settlement scenarios were considered, and probability weighted to arrive at the final valuation. Increases or decreases in the fair value of the promissory note can result from updates to assumptions such as the expected timing or probability of the different settlement scenarios, or changes in discount rates. Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period. Updates to assumptions could have a significant impact on our results of operations in any given period. The Common Warrants (as defined in Note 6) were valued using Black-Scholes utilizing the following inputs; (i) a risk-free interest rate; (ii) volatility based on the expected term of the Common Warrant; (iii) and an exercise price and stock price on the date of the transaction. Several different scenarios were considered, and probability weighted to arrive at the final valuation. Increases or decreases in the fair value of the Common Warrants can result from updates to assumptions such as the expected timing or probability of the different settlement scenarios. Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period. Updates to assumptions could have a significant impact on our results of operations in any given period. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following three levels: • Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. • Level 2: Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands):
|  | September 30, 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 3,675 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,675 |
Commercial paper |  |  | — |  |  |  | 1,245 |  |  |  | — |  |  |  | 1,245 |
U.S. Treasury bills |  |  | — |  |  |  | 498 |  |  |  | — |  |  |  | 498 |
Total cash equivalents |  |  | 3,675 |  |  |  | 1,743 |  |  |  | — |  |  |  | 5,418 |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |
Commercial paper |  |  | — |  |  |  | 3,386 |  |  |  | — |  |  |  | 3,386 |
U.S. Treasury bills |  |  | — |  |  |  | 3,491 |  |  |  | — |  |  |  | 3,491 |
U.S. Government sponsored entities - mortgage backed securities |  |  | — |  |  |  | 1,737 |  |  |  | — |  |  |  | 1,737 |
Total short-term investments |  |  | — |  |  |  | 8,614 |  |  |  | — |  |  |  | 8,614 |
Total assets measured at fair value |  | $ | 3,675 |  |  | $ | 10,357 |  |  | $ | — |  |  | $ | 14,032 |
|  | December 31, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 6,117 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,117 |
Commercial paper |  |  | — |  |  |  | 746 |  |  |  | — |  |  |  | 746 |
U.S. Treasury bills |  |  | — |  |  |  | 749 |  |  |  | — |  |  |  | 749 |
Total cash equivalents |  |  | 6,117 |  |  |  | 1,495 |  |  |  | — |  |  |  | 7,612 |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |
Commercial paper |  |  | — |  |  |  | 6,573 |  |  |  | — |  |  |  | 6,573 |
U.S. Treasury bills |  |  | — |  |  |  | 3,227 |  |  |  | — |  |  |  | 3,227 |
U.S. Government sponsored entities - mortgage-backed securities |  |  | — |  |  |  | 934 |  |  |  | — |  |  |  | 934 |
Total short-term investments |  |  | — |  |  |  | 10,734 |  |  |  | — |  |  |  | 10,734 |
Total assets measured at fair value |  | $ | 6,117 |  |  | $ | 12,229 |  |  | $ | — |  |  | $ | 18,346 |
Money market funds are highly liquid investments which are actively traded. The pricing information on the Company’s money market funds is based on quoted prices in active markets for identical securities. This approach results in the classification of these securities as Level 1 of the fair value hierarchy. Commercial paper, Corporate debt securities, U.S. Treasury bills and U.S. Government sponsored entities - mortgage-backed are classified as Level 2 within the hierarchy and are carried at fair value with unrealized gains and losses included in other comprehensive loss as a component of stockholders’ equity until realized. The Company estimates the fair values of these securities by taking into consideration valuations obtained from third-party pricing sources. During the nine months ended September 30, 2025, there were no transfers between Level 1, Level 2 and Level 3. The following table presents information about the Company’s financial liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands).
|  | September 30, 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Promissory Note |  | $ | — |  |  | $ | — |  |  | $ | 8,900 |  |  | $ | 8,900 |
Warrant Liability |  |  | — |  |  |  | — |  |  |  | 2,600 |  |  |  | 2,600 |
Total liabilities measured at fair value |  | $ | — |  |  | $ | — |  |  | $ | 11,500 |  |  | $ | 11,500 |
|  | December 31, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Warrant Liability |  | $ | — |  |  | $ | — |  |  | $ | 1,700 |  |  | $ | 1,700 |
Total liabilities measured at fair value |  | $ | — |  |  | $ | — |  |  | $ | 1,700 |  |  | $ | 1,700 |
The following provides a reconciliation for all liabilities measured at fair value using Level 3 inputs for the nine months ended September 30, 2025 and 2024 (in thousands):
Promissory Note liability |  |  |
Balance at December 31, 2024 |  | $ | — |
Issuance of Promissory Note |  |  | 8,923 |
Change in Fair Value of Promissory Note |  |  | (323 | )
Balance at March 31, 2025 |  |  | 8,600 |
Change in Fair Value of Promissory Note |  |  | (100 | )
Balance at June 30, 2025 |  |  | 8,500 |
Change in Fair Value of Promissory Note |  |  | 400 |
Balance at September 30, 2025 |  | $ | 8,900 |
Warrant liability |  |  |
Balance at December 31, 2024 |  | $ | 1,700 |
Issuance of Lender Warrants |  |  | 1,077 |
Change in Fair Value of Tranche B Warrants |  |  | (1,200 | )
Change in Fair Value of Lender Warrants |  |  | (177 | )
Balance at March 31, 2025 |  |  | 1,400 |
Change in Fair Value of Tranche B Warrants |  |  | (200 | )
Change in Fair Value of Lender Warrants |  |  | (200 | )
Balance at June 30, 2025 |  |  | 1,000 |
Change in Fair Value of Tranche B Warrants |  |  | 800 |
Change in Fair Value of Lender Warrants |  |  | 800 |
Balance at September 30, 2025 |  | $ | 2,600 |
Balance at December 31, 2023 |  | $ | 11,190 |
Change in Fair Value of Warrants |  |  | (5,590 | )
Balance at March 31, 2024 |  |  | 5,600 |
Change in Fair Value of Warrants |  |  | (2,300 | )
Balance at June 30, 2024 |  |  | 3,300 |
Forfeiture of warrants |  |  | (200 | )
Change in Fair Value of Warrants |  |  | 300 |
Balance at September 30, 2024 |  | $ | 3,400 |
The following table presents information as to cost, unrealized gains and losses and fair value determination of the Company’s financial assets measured at fair value on a recurring basis (in thousands):
|  | September 30, 2025 |
|  | Amortized Cost |  |  | Unrealized Gains |  |  | Unrealized Losses |  |  | Aggregate Fair Value |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 3,675 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,675 |
Commercial paper |  |  | 1,245 |  |  |  | — |  |  |  | — |  |  |  | 1,245 |
U.S. Treasury bills |  |  | 498 |  |  |  | — |  |  |  | — |  |  |  | 498 |
Total cash equivalents |  |  | 5,418 |  |  |  | — |  |  |  | — |  |  |  | 5,418 |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |
Commercial paper |  |  | 3,385 |  |  |  | 1 |  |  |  |  |  |  | 3,386 |
U.S. Treasury bills |  |  | 3,491 |  |  |  | — |  |  |  |  |  |  | 3,491 |
U.S. Government sponsored entities - mortgage-backed securities |  |  | 1,737 |  |  |  | — |  |  |  | — |  |  |  | 1,737 |
Total short-term investments |  |  | 8,613 |  |  |  | 1 |  |  |  | — |  |  |  | 8,614 |
Total assets measured at fair value |  | $ | 14,031 |  |  | $ | 1 |  |  | $ | — |  |  | $ | 14,032 |
As of September 30, 2025, the contractual maturities of all available-for-sale investments were less than 12 months. The Company periodically reviews the available-for-sale investments for other-than-temporary impairment loss. The Company had short-term investments in unrealized gain positions as of September 30, 2025.
|  | December 31, 2024 |
|  | Amortized Cost |  |  | Unrealized Gains |  |  | Unrealized Losses |  |  | Aggregate Fair Value |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 6,117 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,117 |
Commercial paper |  |  | 746 |  |  |  | — |  |  |  | — |  |  |  | 746 |
U.S. Treasury bills |  |  | 749 |  |  |  | — |  |  |  | — |  |  |  | 749 |
Total cash equivalents |  |  | 7,612 |  |  |  | — |  |  |  | — |  |  |  | 7,612 |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |
Commercial paper |  |  | 6,571 |  |  |  | 2 |  |  |  | — |  |  |  | 6,573 |
U.S. Treasury bills |  |  | 3,225 |  |  |  | 2 |  |  |  | — |  |  |  | 3,227 |
U.S. Government sponsored entities - mortgage backed securities |  |  | 934 |  |  |  | — |  |  |  | — |  |  |  | 934 |
Total short-term investments |  |  | 10,730 |  |  |  | 4 |  |  |  | — |  |  |  | 10,734 |
Total assets measured at fair value |  | $ | 18,342 |  |  | $ | 4 |  |  | $ | — |  |  | $ | 18,346 |
As of December 31, 2024, the contractual maturities of all available-for-sale investments were less than 12 months. The Company periodically reviews the available-for-sale for other-than-temporary impairment loss. The Company had short-term investments in unrealized gain positions as of December 31, 2024.

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