COGNITION THERAPEUTICS INC Fair Value Disclosure
3. Financial Instruments and Fair Value Measurements
Financial assets and liabilities measured at fair value are summarized below:
As of December 31, 2024 | ||||||||||||
Significant | ||||||||||||
Quoted Priced in | Significant Other | Unobservable | ||||||||||
Active Markets | Observable Inputs | Inputs | ||||||||||
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total | |||||
Assets: |
|
|
|
|
|
|
|
| ||||
Money market funds | $ | 23,999 | $ | — | $ | — | $ | 23,999 | ||||
Total assets | $ | 23,999 | $ | — | $ | — | $ | 23,999 | ||||
As of December 31, 2023 | ||||||||||||
Significant | ||||||||||||
Quoted Priced in | Significant Other | Unobservable | ||||||||||
Active Markets | Observable Inputs | Inputs | ||||||||||
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total | |||||
Assets: |
|
|
|
|
|
|
|
| ||||
Money market funds | $ | 29,391 | $ | — | $ | — | $ | 29,391 | ||||
Total assets | $ | 29,391 | $ | — | $ | — | $ | 29,391 | ||||
There were no Level 3 financial instruments during the year ended December 31, 2024 and 2023.
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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.