Eledon Pharmaceuticals, Inc. Fair Value Disclosure
Note 4. Fair Value Measurements
Financial assets and liabilities are recorded at fair value.
The Company classifies fair value 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:
Financial Assets
The following table summarizes the Company's financial asset instruments measured at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands). Included within cash and cash equivalents on the consolidated balance sheets, but excluded from the fair value hierarchy table, are cash deposits held at financial institutions.
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December 31, 2025 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Assets: |
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Cash equivalents: |
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Money market funds |
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$ |
6,734 |
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$ |
— |
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$ |
— |
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$ |
6,734 |
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U.S. treasuries |
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— |
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14,955 |
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— |
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14,955 |
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Total cash equivalents |
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6,734 |
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14,955 |
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— |
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21,689 |
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Short-term investments: |
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U.S. treasuries |
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— |
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59,861 |
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— |
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59,861 |
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U.S. government securities |
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— |
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50,667 |
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— |
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50,667 |
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Total short-term investments |
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— |
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110,528 |
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— |
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110,528 |
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Total financial assets |
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$ |
6,734 |
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$ |
125,483 |
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$ |
— |
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$ |
132,217 |
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December 31, 2024 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Assets: |
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Cash equivalents: |
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Money market funds |
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$ |
1,215 |
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$ |
— |
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$ |
— |
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$ |
1,215 |
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U.S. treasuries |
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— |
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17,464 |
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— |
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17,464 |
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Total cash equivalents |
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1,215 |
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17,464 |
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— |
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18,679 |
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Short-term investments: |
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U.S. government securities |
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— |
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119,629 |
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— |
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119,629 |
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Total short-term investments |
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— |
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119,629 |
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— |
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119,629 |
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Total financial assets |
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$ |
1,215 |
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$ |
137,093 |
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$ |
— |
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$ |
138,308 |
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Warrant Liabilities
The following table summarizes the Company's warrant liabilities (see Note 9. Preferred Stock and Stockholders' Equity) measured at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands) and was based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.
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December 31, 2025 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Warrant liabilities |
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$ |
— |
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$ |
— |
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$ |
11,416 |
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$ |
11,416 |
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December 31, 2024 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Warrant liabilities |
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$ |
— |
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$ |
— |
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$ |
44,865 |
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$ |
44,865 |
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The following table provides a roll-forward of the aggregate fair value of the warrant liabilities categorized with Level 3 inputs (in thousands):
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Warrant Liability |
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Balance as of December 31, 2024 |
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$ |
44,865 |
|
Change in fair value of warrant liabilities |
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(33,449 |
) |
Settlement of warrant liability |
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|
— |
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Balance as of December 31, 2025 |
|
$ |
11,416 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | Mar 20, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2017 | Apr 2, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Mar 10, 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.