Centessa Pharmaceuticals plcCNTA

Centessa Pharmaceuticals plc Fair Value Disclosure

10-KFiled Mar 24, 20252 min read
Fair Value of Financial Instruments
The following fair value hierarchy table presents fair value information about the Company’s assets and liabilities (amounts in thousands):
Fair value measurement at reporting date using
Quoted prices
in active markets for
identical assets
(Level 1)		Significant
other
observable inputs (Level 2)		Significant
unobservable inputs
(Level 3)
December 31, 2024
Assets
Money Market fund$217,515 $— $— 
U.S. Treasury securities$171,885 $— $— 
Liabilities
Loan and Security Agreement
$— $— $109,450 

Fair value measurement at reporting date using
Quoted prices
in active markets for
identical assets
(Level 1)		Significant
other
observable inputs (Level 2)		Significant
unobservable inputs
(Level 3)
December 31, 2023
Assets
Money Market fund$28,339 
U.S. Treasury securities128,519 
Liabilities
Note Purchase Agreement$— $— $75,700 
We classify our investments in available-for-sale U.S. Treasury securities and the money market fund into Level 1 of the ASC Topic 820 hierarchy because fair values represent quoted market prices for identical or comparable instruments.
The following represents the amortized cost bases and fair values of the Company’s U.S. Treasury securities and its money market fund as of December 31, 2024 (amounts in thousands):
Amortized CostGross Unrealized Gains Gross Unrealized LossesFair Value
Money Market fund, included in Cash and cash equivalents$217,515 $— $— $217,515 
U.S. Treasury securities, included in:
Cash and cash equivalents
$72,762 $167 $— $72,929 
Short-term investments95,534 3,422 — 98,956 
Total U.S. Treasury securities$168,296 $3,589 $— $171,885 
For the Company's financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein (amounts in thousands):
Note Purchase Agreement
Balance at January 1, 2023
$69,800 
Change in fair value5,900 
Balance at December 31, 2023
75,700 
Change in fair value
300 
Loss on extinguishment of debt
34,097 
Settlement
(110,097)
Balance at December 31, 2024
$— 
On December 30, 2024, the Company entered into a loan and security agreement (the “Loan and Security Agreement”) with Oxford and received $110.0 million. Substantially all of the proceeds from the initial term loan were used to repay in full the aggregate amount outstanding, which equated to 185% of the principal balance less prior cumulative interest payments plus fees. The Company recognized a loss on the extinguishment of this debt of $34.1 million.

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.

Other Available Disclosures

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