Fair Value Measurements

3 Months Ended

Mar. 31, 2025

Fair Value Disclosures [Abstract]

Fair Value Measurements

8.Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 - Inputs other than quoted market prices included in Level 1 are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy:

		March 31, 2025
	Valuation Hierarchy	Amortized Cost		Unrealized Gain		Unrealized Loss			Fair Value
		(In thousands)
Assets:
Cash equivalents:
Money market funds	Level 1		50,488		—		—			50,488
Marketable securities:
U.S. treasuries	Level 1		32,398		2		(12	)		32,388
Government agencies bonds	Level 2		1,998		—		—			1,998
Total financial assets		$	84,884	$	2	$	(12	)	$	84,874

		December 31, 2024
	Valuation Hierarchy	Amortized Cost		Unrealized Gain		Unrealized Loss			Fair Value
		(In thousands)
Assets:
Cash equivalents:
Money market funds	Level 1		1,289		—		—			1,289
Marketable securities:
U.S. treasuries	Level 1		49,135		28		(12	)		49,151
Commercial paper	Level 2		3,974		3		—			3,977
Government agencies bonds	Level 2		3,987		8		—			3,995
Total financial assets		$	58,385	$	39	$	(12	)	$	58,412

Money market funds and U.S. treasury securities are classified as Level 1 because they are valued using quoted market prices in active markets for identical assets. Financial instruments classified within Level 2 of the fair value hierarchy are valued based on observable inputs or can be derived from non-binding quotes from the Company’s investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, or historical pricing trends of a security relative to its peers.

The Company believes it is more likely than not that its marketable securities in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not recorded any allowance for credit losses on its investment securities. Based upon its quarterly impairment review, the Company determined that the unrealized losses were not attributed to credit risk, but were primarily driven by the broader change in interest rates.

As of March 31, 2025, the fair value of available-for-sale marketable securities was $34.4 million, all of which had remaining maturities of less than one year.

The Company's financial liability measured at fair value on a recurring basis consists of the Remaining Lender Warrant issued in connection with the Loan Agreement (see Note 6, Term Loan). The fair value of the warrant liability was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company utilized the Black-Scholes option valuation model to fair value the warrant liability. The fair value is estimated using the Black-Scholes option-pricing model and adjusted for the likelihood of draw downs. The expected term is based on the remaining contractual term of the warrant. The Company estimates its expected stock volatility based on the historical volatility of a set of peer companies, which are publicly traded, and expects to continue to do so until it has adequate historical data regarding the volatility of its own publicly-traded stock price. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the expected term of the Lender Warrant. The Company uses an expected dividend yield of zero based on the fact that the Company has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future. The warrant liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized as a gain or loss in our statement of operations and comprehensive loss. During the three months ended March 31, 2025, the fair value of the warrant liability and its change were not material.

The carrying amount of the Company’s remaining financial assets and liabilities, which include cash, receivables and payables, approximate their fair values due to their short-term nature.