CERUS CORP Fair Value Disclosure
Note 3. Available-for-sale Securities and Fair Value on Financial Instruments
Available-for-sale Securities
The following is a summary of available-for-sale securities at December 31, 2025 (in thousands):
|
|
December 31, 2025 |
|
|||||||||||||
|
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Fair Value |
|
||||
Money market funds |
|
$ |
1,810 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,810 |
|
United States government agency securities |
|
|
23,431 |
|
|
|
49 |
|
|
|
(1 |
) |
|
|
23,479 |
|
Corporate debt securities |
|
|
36,768 |
|
|
|
55 |
|
|
|
(1 |
) |
|
|
36,822 |
|
Mortgage-backed securities |
|
|
2,795 |
|
|
|
7 |
|
|
|
(185 |
) |
|
|
2,617 |
|
Total available-for-sale securities |
|
$ |
64,804 |
|
|
$ |
111 |
|
|
$ |
(187 |
) |
|
$ |
64,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The following is a summary of available-for-sale securities at December 31, 2024 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
December 31, 2024 |
|
|||||||||||||
|
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Fair Value |
|
||||
Money market funds |
|
$ |
1,773 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,773 |
|
United States government agency securities |
|
|
24,060 |
|
|
|
54 |
|
|
|
(52 |
) |
|
|
24,062 |
|
Corporate debt securities |
|
|
33,357 |
|
|
|
53 |
|
|
|
(39 |
) |
|
|
33,371 |
|
Mortgage-backed securities |
|
|
3,070 |
|
|
|
— |
|
|
|
(317 |
) |
|
|
2,753 |
|
Total available-for-sale securities |
|
$ |
62,260 |
|
|
$ |
107 |
|
|
$ |
(408 |
) |
|
$ |
61,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities at December 31, 2025 and December 31, 2024, consisted of the following by contractual maturity (in thousands):
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
Amortized Cost |
|
|
Fair Value |
|
|
Amortized Cost |
|
|
Fair Value |
|
||||
One year or less |
|
$ |
46,128 |
|
|
$ |
46,209 |
|
|
$ |
38,174 |
|
|
$ |
38,173 |
|
Greater than one year and less than five years |
|
|
18,676 |
|
|
|
18,519 |
|
|
|
24,086 |
|
|
|
23,786 |
|
Total available-for-sale securities |
|
$ |
64,804 |
|
|
$ |
64,728 |
|
|
$ |
62,260 |
|
|
$ |
61,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The following tables show all available-for-sale marketable securities in an unrealized loss position for which an allowance for credit losses has not been recognized and the related gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):
|
December 31, 2025 |
|
|||||||||||||||||||||
|
Less than 12 Months |
|
|
12 Months or Greater |
|
|
Total |
|
|||||||||||||||
|
Fair Value |
|
|
Unrealized Loss |
|
|
Fair Value |
|
|
Unrealized Loss |
|
|
Fair Value |
|
|
Unrealized Loss |
|
||||||
Corporate debt securities |
$ |
3,203 |
|
|
$ |
(1 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,203 |
|
|
$ |
(1 |
) |
United States government agency securities |
|
— |
|
|
|
— |
|
|
|
260 |
|
|
|
(1 |
) |
|
|
260 |
|
|
|
(1 |
) |
Mortgage-backed securities |
|
214 |
|
|
|
(1 |
) |
|
|
2,219 |
|
|
|
(184 |
) |
|
|
2,433 |
|
|
|
(185 |
) |
Total |
$ |
3,417 |
|
|
$ |
(2 |
) |
|
$ |
2,479 |
|
|
$ |
(185 |
) |
|
$ |
5,896 |
|
|
$ |
(187 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
December 31, 2024 |
|
|||||||||||||||||||||
|
Less than 12 Months |
|
|
12 Months or Greater |
|
|
Total |
|
|||||||||||||||
|
Fair Value |
|
|
Unrealized Loss |
|
|
Fair Value |
|
|
Unrealized Loss |
|
|
Fair Value |
|
|
Unrealized Loss |
|
||||||
Corporate debt securities |
$ |
14,002 |
|
|
$ |
(27 |
) |
|
$ |
3,967 |
|
|
$ |
(12 |
) |
|
$ |
17,969 |
|
|
$ |
(39 |
) |
United States government agency securities |
|
8,468 |
|
|
|
(37 |
) |
|
|
3,279 |
|
|
|
(15 |
) |
|
|
11,747 |
|
|
|
(52 |
) |
Mortgage-backed securities |
|
402 |
|
|
|
(10 |
) |
|
|
2,351 |
|
|
|
(307 |
) |
|
|
2,753 |
|
|
|
(317 |
) |
Total |
$ |
22,872 |
|
|
$ |
(74 |
) |
|
$ |
9,597 |
|
|
$ |
(334 |
) |
|
$ |
32,469 |
|
|
$ |
(408 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The Company typically invests in highly-rated securities, and its investment policy limits the amount of credit exposure to any one issuer. The policy generally requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for expected credit losses, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. The Company also regularly reviews its investments in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. During the years ended December 31, 2025, 2024 and 2023, the Company did not recognize any expected credit losses. The Company has no current requirement or intent to sell the securities in an unrealized loss position. The Company expects to recover up to (or beyond) the initial cost of investment for securities held.
The Company recorded less than $0.1 million of gross realized gains from the sale or maturity of available-for-sale investments during the years ended December 31, 2025, 2024 and 2023, respectively. The Company recorded less than $0.1 million of gross realized losses from the sale or maturity of available-for-sale investments during the years ended December 31, 2025, 2024 and 2023, respectively.
Fair Value Disclosures
The Company uses certain assumptions that market participants would use to determine the fair value of an asset or liability in pricing the asset or liability in an orderly transaction between market participants at the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritized the inputs into three broad levels as follows:
Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.
To estimate the fair value of Level 2 debt securities as of December 31, 2025, the Company’s primary pricing service relies on inputs from multiple industry-recognized pricing sources to determine the price for each investment. Corporate debt and U.S. government agency securities are systematically priced by this service as of the close of business each business day. If the primary pricing service does not price a specific asset a secondary pricing service is utilized.
The fair values of the Company’s financial assets and liabilities were determined using the following inputs at December 31, 2025 (in thousands):
|
|
Balance sheet |
|
|
|
|
Quoted |
|
|
Significant |
|
|
Significant Unobservable Inputs |
|
||||
|
|
classification |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Money market funds |
|
Cash and cash equivalents |
|
$ |
1,810 |
|
|
$ |
1,810 |
|
|
$ |
— |
|
|
$ |
— |
|
United States government agency securities |
|
investments |
|
|
23,479 |
|
|
|
— |
|
|
|
23,479 |
|
|
|
— |
|
Corporate debt securities |
|
investments |
|
|
36,822 |
|
|
|
— |
|
|
|
36,822 |
|
|
|
— |
|
Mortgage-backed securities |
|
investments |
|
|
2,617 |
|
|
|
— |
|
|
|
2,617 |
|
|
|
— |
|
-term investments |
|
|
|
$ |
64,728 |
|
|
$ |
1,810 |
|
|
$ |
62,918 |
|
|
$ |
— |
|
The fair values of the Company’s financial assets and liabilities were determined using the following inputs at December 31, 2024 (in thousands):
|
|
Balance sheet |
|
|
|
|
Quoted |
|
|
Significant |
|
|
Significant Unobservable Inputs |
|
||||
|
|
classification |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Money market funds |
|
Cash and cash equivalents |
|
$ |
1,773 |
|
|
$ |
1,773 |
|
|
$ |
— |
|
|
$ |
— |
|
United States government agency securities |
|
|
|
24,062 |
|
|
|
— |
|
|
|
24,062 |
|
|
|
— |
|
|
Corporate debt securities |
|
S investments |
|
|
33,371 |
|
|
|
— |
|
|
|
33,371 |
|
|
|
— |
|
Mortgage-backed securities |
|
investments |
|
|
2,753 |
|
|
|
— |
|
|
|
2,753 |
|
|
|
— |
|
-term investments |
|
|
|
$ |
61,959 |
|
|
$ |
1,773 |
|
|
$ |
60,186 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Company did not have any transfers among fair value measurement levels during the years ended December 31, 2025 and December 31, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Mar 5, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Mar 8, 2018 | |
| 2016 | Mar 8, 2017 | |
| 2015 | Mar 9, 2016 | |
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.