Financial Instruments and Fair Value Measurements

6 Months Ended

Jun. 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
	June 30, 2025
	Level 1		Level 2		Level 3		Total
Assets	(in thousands)
Cash equivalents:
Money market fund	$	32,135	$	—	$	—	$	32,135
Restricted cash:
Money market fund		100		—		—		100
Short-term investments
U.S. Treasury bills		214,645		—		—		214,645
Long-term investments
U.S. Treasury notes		31,149		—		—		31,149
Total assets	$	278,029	$	—	$	—	$	278,029
Liabilities
Series C warrant liabilities	$	—	$	—	$	—	$	—
Common B warrant liabilities		—		—		—		—
Total liabilities	$	—	$	—	$	—	$	—

	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 six months ended June 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 six months ended June 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 June 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 June 30, 2025	$	—