ALUMIS INC. Fair Value Disclosure
4.Fair Value Measurements
The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The guidance establishes three levels of the fair value hierarchy as follows:
Level 1—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 that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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 Company recognizes transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs.
The Company’s financial instruments consist of Level 1, Level 2 and Level 3 financial instruments. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy.
Level 1 financial instruments are comprised of money market funds and U.S. Treasury obligations. Level 2 financial instruments are comprised of U.S. Treasury obligations, corporate debt obligations, commercial paper, supranational debt obligations and government development bank obligations. Short term marketable securities are considered Level 2 when their fair values are determined using inputs that are observable in the market or can be derived principally from or corroborated by observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities. In addition, Level 2 financial instruments are valued using comparisons to like-kind financial instruments and models that use readily observable market data as their basis. Level 3 financial instruments include derivative liabilities issued in March 2024 and settled in May 2024 in connection with the closing of the second tranche of the Series C redeemable convertible preferred stock financing.
The following tables present the Company’s fair value hierarchy for financial assets measured at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands):
| December 31, 2025 | |||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: | ||||||||||||
Cash equivalents | ||||||||||||
Money market funds | $ | 81,729 | $ | — | $ | — | $ | 81,729 | ||||
U.S. treasuries |
| 3,971 | — | — |
| 3,971 | ||||||
Marketable securities |
|
| ||||||||||
U.S. Treasury obligations | 110,809 | 37,673 | — | 148,482 | ||||||||
Corporate debt obligations | — | 30,743 | — | 30,743 | ||||||||
Commercial paper | — | 27,672 | — | 27,672 | ||||||||
Supranational debt obligations | — | 7,922 | — | 7,922 | ||||||||
Government development bank obligations |
| — |
| 4,012 |
| — |
| 4,012 | ||||
Total assets | $ | 196,509 | $ | 108,022 | $ | — | $ | 304,531 | ||||
| December 31, 2024 | |||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: | ||||||||||||
Cash equivalents | ||||||||||||
Money market funds | $ | 168,847 | $ | — | $ | — | $ | 168,847 | ||||
Marketable securities | ||||||||||||
U.S. Treasury obligations |
| 47,137 |
| 71,600 |
| — |
| 118,737 | ||||
Total assets | $ | 215,984 | $ | 71,600 | $ | — | $ | 287,584 | ||||
In connection with the Series C redeemable convertible preferred stock financing in March 2024, the Company issued to investors two freestanding financial instruments: the Series C second tranche option liability and the put right option liability. The Company estimated their fair value using a Black-Scholes option-pricing model weighted by the probability of occurring. The Company used the intrinsic value calculation to estimate the fair value of the Series C second tranche option liability and the put right option liability upon settlement. Significant estimates and assumptions impacting the derivative liability fair value included the probability of each option exercise, redeemable convertible preferred stock fair value, estimated stock volatility and the expected term.
The following table provides a range of assumptions used in the valuation of the derivative liability for the year ended December 31, 2024:
Year Ended December 31, | ||
| 2024 | |
Expected term (in years) | 0.2 – 0.4 | |
Volatility | 55.1% – 59.9% | |
Risk-free interest rate | 5.4% – 5.5% | |
Dividend yield | 0.00% | |
Probability of option exercise | 0.0% – 100.0% | |
The following table provides a roll-forward of the fair value of the Company’s Level 3 financial instruments, the derivative liability, for the year ended December 31, 2024 (in thousands):
Year Ended December 31, | ||
2024 | ||
Fair value at beginning of period | $ | — |
Fair value upon issuance | 8,913 | |
5,406 | ||
Fair value upon settlement | (14,319) | |
Fair value at end of period | $ | — |
The Company did not hold Level 3 financial instruments for the year ended December 31, 2025. There were no transfers between Level 1, Level 2 or Level 3 categories for the years ended December 31, 2025 and 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | Mar 19, 2025 | |
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.