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Fair Value Disclosures | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Disclosures | Fair Value Disclosures The accounting guidance defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 - Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following table summarizes the Company's financial instruments measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024.
|  |  |  | Fair Value Measurements at Reporting Date Using
|  |  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
As of September 30, 2025 |  | Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Cash Equivalents: |  |  |  |  |  |  |  |
Money Market Funds |  | $ | 3,633,176 |  |  | $ | 3,633,176 |  |  | $ | — |  |  | $ | — |
Total Cash Equivalents Measured at Fair Value |  | $ | 3,633,176 |  |  | $ | 3,633,176 |  |  | $ | — |  |  | $ | — |
Short-term Investments: |  |  |  |  |  |  |  |
Government Agency Securities |  | $ | 10,209,139 |  |  | $ | — |  |  | $ | 10,209,139 |  |  | $ | — |
Corporate Debt Securities |  | 3,657,407 |  |  | — |  |  | 3,657,407 |  |  | — |
Total Short-term Investments Measured at Fair Value |  | $ | 13,866,546 |  |  | $ | — |  |  | $ | 13,866,546 |  |  | $ | — |
Total Assets Measured at Fair Value |  | $ | 17,499,722 |  |  | $ | 3,633,176 |  |  | $ | 13,866,546 |  |  | $ | — |
|  |  |  | Fair Value Measurements at Reporting Date Using
|  |  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
As of December 31, 2024 |  | Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Cash Equivalents: |  |  |  |  |  |  |  |
Money Market Funds |  | $ | 562,604 |  |  | $ | 562,604 |  |  | $ | — |  |  | $ | — |
US Treasury Securities |  | 691,917 |  |  | — |  |  | 691,917 |  |  | — |
Total Cash Equivalents Measured at Fair Value |  | $ | 1,254,521 |  |  | $ | 562,604 |  |  | $ | 691,917 |  |  | $ | — |
Short-term Investments: |  |  |  |  |  |  |  |
US Treasury Securities |  | $ | 92,314 |  |  | $ | — |  |  | $ | 92,314 |  |  | $ | — |
Government Agency Securities |  | 18,540,550 |  |  | — |  |  | 18,540,550 |  |  | — |
Corporate Debt Securities |  | 4,062,673 |  |  | — |  |  | 4,062,673 |  |  | — |
Asset Backed Securities |  | 304,223 |  |  | — |  |  | 304,223 |  |  | — |
Total Short-term Investments Measured at Fair Value |  | $ | 22,999,760 |  |  | $ | — |  |  | $ | 22,999,760 |  |  | $ | — |
Total Assets Measured at Fair Value |  | $ | 24,254,281 |  |  | $ | 562,604 |  |  | $ | 23,691,677 |  |  | $ | — |
In connection with historical acquisitions, additional consideration may be owed by the Company related to the achievement of certain milestones and such contingent consideration payments are required by U.S. GAAP to be presented at fair value. The following table provides information for liabilities measured at fair value on a recurring basis using Level 3 inputs:
| September 30, 2025 |  | December 31, 2024
Contingent Consideration: |  |  |
Non-current | $ | 2,883,423 |  |  | $ | 4,191,490 |
Total Contingent Consideration | $ | 2,883,423 |  |  | $ | 4,191,490 |
The Company initially values contingent consideration related to business combinations using a probability-weighted calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows for certain milestones. Key assumptions used to estimate the fair value of contingent consideration include projected financial information, market data and the probability and timing of achieving the specific milestones. After the initial valuation, the Company generally uses its best estimate to measure contingent consideration at each subsequent reporting period using the following unobservable Level 3 inputs:
| Valuation Technique |  | Unobservable Inputs |  | September 30, 2025 |  | December 31, 2024
| Discounted cash flow |  | Payment discount rate |  | 13.9 | % |  | 15.1 | %
Bayon |  |  | Payment period |  | 2027 - 2030 |  | 2027 - 2029
Panoptes |  |  | Payment period |  | 2029 - 2031 |  | 2027 - 2028
Bayon |  |  | Probability of success for payment |  | 25% - 45% |  | 48% - 77%
Panoptes |  |  | Probability of success for payment |  | 30% - 33% |  | 30% - 33%
Significant changes in these assumptions could result in a significantly higher or lower fair value. The contingent consideration reported in the above table is adjusted quarterly based upon the passage of time or the anticipated success or failure of achieving certain milestones. The change in fair value of contingent consideration of $(1.3) million for the nine months ended September 30, 2025, was primarily driven by an increased discount period and changes to the development plan which lowered the probability of success to align with a focus initially on a single indication for KIO-301. This reduced probability of success is solely based on the strategic shift in the order in which indications are to be pursued and is completely independent of KIO-301's potential pathway to approval in retinitis pigmentosa. The change in fair value of contingent consideration of $1.0 million for the nine months ended September 30, 2024 was primarily driven by the strategic decision to cease continued development, or search for partnership leading to commercialization of, KIO-201. The change in fair value of contingent consideration is recorded within operating expenses on the accompanying condensed consolidated statements of operations and comprehensive (loss) income. The Company records in-process R&D projects acquired in asset acquisitions that have not reached technological feasibility and which have no alternative future use at estimated fair value. For in-process R&D projects acquired in business combinations, the Company capitalizes the in-process R&D project as an indefinite-lived intangible asset and evaluates this asset annually for impairment until the R&D process has been completed. Once the R&D process is complete, the Company amortizes the R&D asset over its remaining useful life. ASC 350 allows an entity to first assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired. If it is more likely than not that the asset is impaired, the entity must calculate the fair value of the asset and record an impairment charge if the carrying amount exceeds fair value. If an entity concludes that there is a less than 50 percent likelihood that the asset is impaired, no further action is required. An indefinite-lived intangible asset should be tested for impairment if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If such events or changes have occurred, a quantitative assessment is required. If an entity bypasses the qualitative assessment or determines from its qualitative assessment that an indefinite-lived intangible asset is more likely than not impaired, a quantitative impairment test should be performed. The quantitative impairment test compares the fair value of an indefinite-lived intangible asset with the asset’s carrying amount. If the fair value of the indefinite-lived intangible asset is less than the carrying amount, an impairment loss should be recognized in an amount equal to the difference in accordance with ASC 350-30-35-19. The Company values in-process R&D related to asset acquisitions using the Income Approach which measures the value of an asset by the present value of its future economic benefits. These benefits can include interest and principal payments, earnings, cost savings, tax deductions, or proceeds from its disposition. Value indications are developed by discounting expected cash flows at a rate of return that incorporates the risk-free rate for the use of funds, the expected rate of inflation, and risks associated with the particular investment. The selected discount rate is generally based on rates of return available from alternative investments of similar type and quality. The Company engaged a third-party valuation firm to assist management to perform its quantitative assessment of in-process R&D as of August 31, 2025, which includes the following unobservable Level 3 inputs:
| Valuation Technique |  | Unobservable Inputs |  | Discount Rate
KIO-104 | Multi-Period Excess Earnings Method |  | Probability of success for next development phase | 17% to 36% |  | 35.5 | %
KIO-301 | Multi-Period Excess Earnings Method |  | Probability of success for next development phase | 25% to 45% |  | 35.5 | %
As of September 30, 2025, the Company assessed qualitative factors to determine whether events and circumstances indicate impairment, and concluded that it is not more likely than not that any assets are impaired.

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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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