Caribou Biosciences, Inc.CRBU
Caribou Biosciences, Inc. Fair Value Disclosure
Fair Value Measurements and Fair Value of Financial Instruments
We classify fair value-based measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1, quoted market prices (unadjusted) in active markets for identical assets or liabilities; Level 2, observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data; and 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, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy. We recognize 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. No such transfers occurred during the years ended December 31, 2025, and 2024.
Recurring Measurements
The following table sets forth our financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):
| Fair Value Measurements as of December 31, 2025 | |||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
U.S. Treasury bills | $ | 86,964 | $ | 86,964 | $ | — | $ | — | |||||||||||||||
U.S. government agency bonds | 28,717 | — | 28,717 | — | |||||||||||||||||||
Money market fund investments (included in cash and cash equivalents) | 11,361 | 11,361 | — | — | |||||||||||||||||||
Corporate debt securities | 8,663 | — | 8,663 | — | |||||||||||||||||||
Commercial paper ($999 included in cash and cash equivalents) | 7,140 | — | 7,140 | — | |||||||||||||||||||
| Total fair value of assets | $ | 142,845 | $ | 98,325 | $ | 44,520 | $ | — | |||||||||||||||
| Fair Value Measurements as of December 31, 2024 | |||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
U.S. Treasury bills ($1,293 included in cash and cash equivalents) | $ | 169,615 | $ | 169,615 | $ | — | $ | — | |||||||||||||||
U.S. government agency bonds ($1,993 included in cash and cash equivalents) | 33,482 | — | 33,482 | — | |||||||||||||||||||
Commercial paper ($1,499 included in cash and cash equivalents) | 26,283 | — | 26,283 | — | |||||||||||||||||||
| Money market fund investments (included in cash and cash equivalents) | 11,508 | 11,508 | — | — | |||||||||||||||||||
| Corporate debt securities | 8,498 | — | 8,498 | — | |||||||||||||||||||
| Total fair value of assets | $ | 249,386 | $ | 181,123 | $ | 68,263 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| MSKCC success payments liability | $ | 785 | $ | — | $ | — | $ | 785 | |||||||||||||||
| Total fair value of liabilities | $ | 785 | $ | — | $ | — | $ | 785 | |||||||||||||||
The fair value and amortized cost of cash equivalents and available-for-sale marketable securities by major security type as of December 31, 2025, and 2024 are presented in the following tables (in thousands):
| As of December 31, 2025 | |||||||||||||||||||||||
| Amortized Cost Basis | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
U.S. Treasury bills | $ | 86,872 | $ | 92 | $ | — | $ | 86,964 | |||||||||||||||
U.S. government agency bonds | 28,707 | 12 | (2) | 28,717 | |||||||||||||||||||
Money market fund investments (included in cash equivalents) | 11,361 | — | — | 11,361 | |||||||||||||||||||
Corporate debt securities | 8,663 | 2 | (2) | 8,663 | |||||||||||||||||||
Commercial paper ($999 included in cash and cash equivalents) | 7,139 | 1 | — | 7,140 | |||||||||||||||||||
| Total cash equivalents and marketable securities | $ | 142,742 | $ | 107 | $ | (4) | $ | 142,845 | |||||||||||||||
| Classified as: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 12,360 | |||||||||||||||||||||
| Marketable securities, short-term | 126,980 | ||||||||||||||||||||||
| Marketable securities, long-term | 3,505 | ||||||||||||||||||||||
| Total cash equivalents and marketable securities | $ | 142,845 | |||||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||
| Amortized Cost Basis | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
U.S. Treasury bills ($1,293 included in cash and cash equivalents) | $ | 169,414 | $ | 268 | $ | (67) | $ | 169,615 | |||||||||||||||
U.S. government agency bonds ($1,993 included in cash and cash equivalents) | 33,440 | 53 | (11) | 33,482 | |||||||||||||||||||
Commercial paper ($1,499 included in cash equivalents) | 26,274 | 11 | (2) | 26,283 | |||||||||||||||||||
Money market fund investments (included in cash equivalents) | 11,508 | — | — | 11,508 | |||||||||||||||||||
| Corporate debt securities | 8,495 | 3 | — | 8,498 | |||||||||||||||||||
| Total cash equivalents and marketable securities | $ | 249,131 | $ | 335 | $ | (80) | $ | 249,386 | |||||||||||||||
| Classified as: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 16,293 | |||||||||||||||||||||
| Marketable securities, short-term | 193,244 | ||||||||||||||||||||||
| Marketable securities, long-term | 39,849 | ||||||||||||||||||||||
| Total cash equivalents and marketable securities | $ | 249,386 | |||||||||||||||||||||
We reviewed each of our marketable securities as of December 31, 2025, and 2024, and concluded that any decline in fair value was not related to credit losses and is recoverable. Accordingly, no allowance for credit losses was recorded and the unrealized losses are reported as a component of accumulated other comprehensive income.
The following table presents the fair value of available-for-sale marketable securities by contractual maturities (in thousands):
| December 31, 2025 | |||||
Due in less than one year | 126,980 | ||||
Due in one to five years | 3,505 | ||||
Total | $ | 130,485 | |||
On May 13, 2025, we provided notice of termination to Memorial Sloan Kettering Cancer Center (“MSKCC”) of the Exclusive License Agreement, dated November 13, 2020, (as amended, “MSKCC Agreement”) with MSKCC Agreement, which termination was effective on August 11, 2025, due to the prior discontinuation of the AMpLify phase 1 clinical trial for our CB-012 product candidate, an allogeneic anti-C-type lectin-like molecule-1 (“CLL-1”) CAR-T cell therapy for the treatment of relapsed or refractory acute myeloid leukemia (“r/r AML”). Under the now-terminated MSKCC Agreement, MSKCC was entitled to certain success payments if our common stock fair value would have increased by certain multiples of increasing value based on a comparison of the fair value of our common stock to $5.1914 per share, adjusted for any future stock splits (the “Initial Share Price”), during a specified time period. The relevant time period commenced on February 13, 2024, when the first patient was dosed with CB-012 in our AMpLify phase 1 clinical trial, and would have ended upon the earlier of the third anniversary from the approval of our biologics license application (“BLA”) by the FDA or 10 years from February 13, 2024.
The following table summarizes the amounts of the MSKCC success payments that would have been due:
| Multiple of Initial Share Price giving rise to a success payment | 5 | x | 10 | x | 15 | x | |||||||||||
| MSKCC success payments (in millions) | $ | 10.0 | $ | 10.0 | $ | 15.0 | |||||||||||
The MSKCC success payments liability under the now-terminated MSKCC Agreement had been carried at fair value and changes were recognized as expense or income as part of other income. During the second quarter of 2025, we re-measured the fair value of the MSKCC success payments liability, updating inputs, such as the probability of achieving a multiple of a defined initial share price and the expected term, to reflect the pending termination of the MSKCC Agreement, and we estimated the fair value to be zero.
The following table sets forth a summary of the changes in the fair value of our Level 3 financial liability (in thousands):
| MSKCC Success Payments Liability | |||||
| Balance at December 31, 2023 | $ | 2,939 | |||
| Change in fair value | (2,154) | ||||
| Balance at December 31, 2024 | $ | 785 | |||
| Change in fair value | (785) | ||||
| Balance at December 31, 2025 | $ | — | |||
Nonrecurring Measurements
On May 15, 2020, we entered into an Exclusive License Agreement for Veterinary Therapeutics (as amended, “Edge chRDNA License Agreement”) with Edge Animal Health (“Edge”), a related party private company, under which we granted Edge an exclusive worldwide license to our Cas9 and Cas12a chRDNA intellectual property and know-how in a defined field of veterinary therapeutics. As consideration for this license agreement, we received 7,500,000 shares of convertible preferred stock (“Edge Stock”) with an estimated fair value of $7.5 million, which was based on the price per share paid for similar shares by another investor, and which was an arm’s length transaction. In June 2024, we received 1,623,275 additional shares of convertible preferred stock pursuant to anti-dilution rights of the Edge chRDNA License Agreement with an estimated fair value of $1.6 million, based on management’s best estimate and judgment. We elected to apply the measurement alternative under Accounting Standards Codification (“ASC”) Topic 321, Investments - Equity Securities (“ASC 321”) for an equity security without a readily determinable fair value. Accordingly, this investment is carried at its cost minus impairment, if any, and is classified within Level 3 of the fair value hierarchy. If we identify observable price changes in orderly transactions for this investment or a similar investment, we will measure the investment at fair value as of the date that the observable transactions or events occurred.
As part of the preparation of our prior quarter financial statements, we assessed potential indicators of impairment of our Edge Stock. As part of our assessment, we considered Edge’s planned operating cash flow requirements, available capital to fund those requirements, and ability to secure additional capital if needed as indicators of impairment. During the second quarter of 2025, we determined that impairment indicators existed, and the fair value of our Edge Stock was zero; as a result, as of June 30, 2025, our Edge Stock was fully impaired and no balance remained. We recorded an impairment expense of $9.2 million as “impairment of equity investment” in our consolidated statements of operations and comprehensive loss for the year ended December 31, 2025. This impairment expense was recorded as a reduction to the investment balance within investments in equity securities in our consolidated balance sheets as of December 31, 2025.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 10, 2025 | |
| 2023 | Mar 11, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Mar 21, 2022 | |
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.