Adicet Bio, Inc. Fair Value Disclosure
3. Fair Value Measurements
The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy which establishes three level of inputs that may be used to measure fair value, as follows:
Level 1 — Observable inputs, such as quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs which 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.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.
Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):
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December 31, 2025 |
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Level 1 |
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Level 2 |
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|
Level 3 |
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Total |
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Assets: |
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|
|
|
|
|
|
|
|
|
|
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Treasury securities (1) (3) |
|
$ |
119,612 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
119,612 |
|
Money market funds (2) (3) |
|
|
31,641 |
|
|
|
— |
|
|
|
— |
|
|
|
31,641 |
|
Total fair value of assets |
|
$ |
151,253 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
151,253 |
|
|
|
December 31, 2024 |
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|
Level 1 |
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|
Level 2 |
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|
Level 3 |
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Total |
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Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasury securities (1) (3) |
|
$ |
119,808 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
119,808 |
|
Money market funds (2) (3) |
|
|
27,084 |
|
|
|
— |
|
|
|
— |
|
|
|
27,084 |
|
Total fair value of assets |
|
$ |
146,892 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
146,892 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
| 2023 | Mar 19, 2024 | |
| 2022 | Mar 15, 2023 | |
| 2021 | Mar 15, 2022 | |
| 2020 | Mar 12, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.