Clene Inc. Fair Value Disclosure
Note 12. Fair Value
Cash and cash equivalents are carried at fair value. Financial instruments, including accounts receivable, accounts payable, and accrued expenses are carried at cost, which approximates fair value given their short-term nature. Our remaining fair value measures are discussed below.
Financial Instruments with Fair Value Measurements on a Recurring Basis
The fair value hierarchy for financial instruments measured at fair value on a recurring basis as of December 31, 2025 was as follows:
| December 31, 2025 | ||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash equivalents: | ||||||||||||||||
| Money market funds | $ | 2,211 | $ | — | $ | — | $ | 2,211 | ||||||||
| Common stock warrant liabilities | — | — | 5,063 | 5,063 | ||||||||||||
| Derivative liabilities | — | — | 3,093 | 3,093 | ||||||||||||
The fair value hierarchy for financial instruments measured at fair value on a recurring basis as of December 31, 2024 was as follows:
| December 31, 2024 | ||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash equivalents: | ||||||||||||||||
| Money market funds | $ | 7,002 | $ | — | $ | — | $ | 7,002 | ||||||||
| Common stock warrant liabilities | — | — | 4,541 | 4,541 | ||||||||||||
| Derivative liabilities | — | — | 1,804 | 1,804 | ||||||||||||
There were no transfers between Level 1, Level 2, or Level 3 during any of the periods above.
Changes in the fair value of our Level 3 financial instruments during the year ended December 31, 2025 were as follows:
| (in thousands) | Common Stock Warrant Liabilities | Derivative Liabilities | ||||||
| Balance – December 31, 2024 | $ | 4,541 | $ | 1,804 | ||||
| Initial fair value of instruments issued | — | 239 | ||||||
| Change in fair value | 522 | 363 | ||||||
| Change in fair value pursuant to the 2024 SSCPN Amendment, recorded as a debt discount | — | 687 | ||||||
| Balance – December 31, 2025 | $ | 5,063 | $ | 3,093 | ||||
Changes in the fair value of our Level 3 financial instruments during the year ended December 31, 2024 were as follows:
| (in thousands) | Common Stock Warrant Liabilities | Derivative Liabilities | Clene Nanomedicine Contingent Earn-out | Initial Stockholders Contingent Earn-out | ||||||||||||
| Balance – December 31, 2023 | $ | 1,481 | $ | — | $ | 75 | $ | 10 | ||||||||
| Initial fair value of instruments issued | 2,291 | 1,425 | ||||||||||||||
| Change in fair value | 702 | 379 | (75 | ) | (10 | ) | ||||||||||
| Change in 2023 Avenue Warrant fair value pursuant to the Third Amendment, recorded as a debt discount | 67 | — | — | — | ||||||||||||
| Balance – December 31, 2024 | $ | 4,541 | $ | 1,804 | $ | — | $ | — | ||||||||
Valuation of Notes Payable and Convertible Notes Payable
Our notes payable and convertible notes payable are categorized within Level 3 of the fair value hierarchy. The 2019 MD Loan and 2019 Cecil Loan are carried at the greater of principal plus accrued interest or the value of the Phantom Shares (see Note 8) which approximates fair value. The 2022 MD Loan, 2022 DHCD Loan, and 2025 SSCP Notes are carried at amortized cost, which approximates fair value due to our credit risk and market interest rates.
The 2024 SSCP Notes are carried at their amortized cost of $9.3 million and $8.6 million as of December 31, 2025 and 2024, respectively. As of December 31, 2024, amortized cost approximated fair value but as of December 31, 2025, amortized cost did not approximate fair value and the fair value of the 2024 SSCP Notes, excluding the SSCPN Derivative Liabilities pertaining to the 2024 SSCP Notes, was approximately $8.2 million.
The SSCPN Derivative Liabilities met the requirements to be separated from the SSCP Notes as derivative instruments measured at fair value. We estimate the fair value of the SSCP Notes with and without the SSCPN Derivative Liabilities and calculate the difference as the implied fair value of the SSCPN Derivative Liabilities. The valuation model consists of a discounted cash flow model and a Black-Scholes option-pricing model with probability weights for the occurrence of (i) a change of control transaction, (ii) dissolution of the Company, or (iii) held to maturity. These estimates require significant judgment. The carrying amount may fluctuate significantly and the actual settlement amount may be materially different from the estimated fair value. The unobservable valuation inputs were as follows:
| December 31, | August 13, | August 13, | December 31, | |||||||||||||
| 2025 | 2025(1) | 2025(2) | 2024(3) | |||||||||||||
| Expected stock price volatility | 107.30 | % | 96.30 | % | 89.20 | % | 101.50 | % | ||||||||
| Discount rate | 19.00 | % | 21.00 | % | 21.00 | % | % | |||||||||
| Risk-free interest rate | 3.50% – 3.60 | % | 3.80% – 4.10 | % | 3.90% – 4.10 | % | 4.20 | % | ||||||||
| Expected dividend yield | % | % | 0.00 | % | 0.00 | % | ||||||||||
| Expected term (in years) | 0.38 – 1.12 | 0.47 – 1.50 | 0.44 – 0.85 | 0.50 – 1.47 | ||||||||||||
| Probability of change of control | 20.00 | % | 20.00 | % | 20.00 | % | 10.00 | % | ||||||||
| Probability of dissolution | 35.00 | % | 45.00 | % | 45.00 | % | 45.00 | % | ||||||||
| Probability of held to maturity | 45.00 | % | 35.00 | % | 35.00 | % | 45.00 | % | ||||||||
| (1) | Represents the unobservable inputs to the valuation of the SSCPN Derivative Liabilities related to: (i) the 2024 SSCP Notes immediately following an amendment in August 2025, and (ii) the 2025 SSCP Notes at issuance. |
| (2) | Represents the unobservable inputs to the valuation of the SSCPN Derivative Liabilities related to the 2024 SSCP Notes immediately preceding an amendment in August 2025. |
| (3) | Represents the unobservable inputs to the valuation of the SSCPN Derivative Liabilities related to the 2024 SSCP Notes only. |
Valuation of the Common Stock Warrant Liabilities
The 2023 Avenue Warrant, as amended, is classified as a liability and carried at fair value. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of (i) settlement of the instrument upon a change of control transaction, (ii) dissolution of the Company, or (iii) held to expiration. These estimates require significant judgment. The carrying amount may fluctuate significantly and the actual settlement amount may be materially different from the estimated fair value. The unobservable valuation inputs were as follows:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Expected stock price volatility | 104.40% – 119.00 | % | 100.20% – 101.40 | % | ||||
| Risk-free interest rate | 3.50% – 3.60 | % | 4.20% – 4.30 | % | ||||
| Expected dividend yield | 0.00 | % | 0.00 | % | ||||
| Expected term (in years) | 0.50 – 2.50 | 0.75 – 3.50 | ||||||
| Probability of change of control | 20.00 | % | 10.00 | % | ||||
| Probability of dissolution | 35.00 | % | 45.00 | % | ||||
| Probability of held to expiration | 45.00 | % | 45.00 | % | ||||
Pursuant to an underwritten public offering in June 2023, we issued warrants to purchase 2,500,000 shares of Common Stock at $22.00 per share (the “Tranche A Warrants”). The Tranche A Warrants are classified as a liability and carried at fair value. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of (i) acceptance of a new drug application (“NDA”) by the U.S. Food and Drug Administration (“FDA”) for CNM-Au8, (ii) settlement upon a fundamental transaction, (iii) dissolution of the Company, and (iv) held to expiration. These estimates require significant judgment. The carrying amount may fluctuate significantly and the actual settlement amount may be materially different from the estimated fair value. The unobservable valuation inputs were as follows:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Expected stock price volatility | 124.00 | % | 97.80% – 101.90 | % | ||||
| Risk-free interest rate | 3.60 | % | 4.20 | % | ||||
| Expected dividend yield | 0.00 | % | 0.00 | % | ||||
| Expected term (in years) | 0.46 | 0.71 – 1.46 | ||||||
| Probability of NDA acceptance before warrant expiration | 0.00 | % | 20.00 | % | ||||
| Probability of fundamental transaction before warrant expiration | 0.00 | % | 10.00 | % | ||||
| Probability of dissolution before warrant expiration | 35.00 | % | 45.00 | % | ||||
| Probability of held to expiration | 65.00 | % | 25.00 | % | ||||
Pursuant to a registered direct public offering in October 2024, we issued warrants to purchase 1,546,914 shares of Common Stock at $4.82 per share (the “2024 Common Warrants”). The 2024 Common Warrants are classified as a liability and carried at fair value. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of (i) dissolution of the Company and (ii) held to maturity. These estimates require significant judgment. The carrying amount may fluctuate significantly and the actual settlement amount may be materially different from the estimated fair value. The unobservable valuation inputs were as follows:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Expected stock price volatility | 104.30 | % | 107.50 | % | ||||
| Risk-free interest rate | 3.60 | % | 4.40 | % | ||||
| Expected dividend yield | 0.00 | % | 0.00 | % | ||||
| Expected term (in years) | 3.75 | 4.75 | ||||||
| Probability of dissolution | 35.00 | % | 45.00 | % | ||||
| Probability of held to expiration | 65.00 | % | 55.00 | % | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 17, 2026 | Showing above |
| 2024 | Mar 24, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Mar 13, 2023 | |
| 2021 | Mar 11, 2022 | |
| 2020 | Mar 29, 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.