Fair Value MeasurementsThe following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:
| | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2025 |
| Total | | Level 1 | | Level 2 | | Level 3 |
| Assets: | | | | | | | |
| Money market funds | $ | 39,252 | | | $ | 39,252 | | | $ | — | | | $ | — | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2024 |
| Total | | Level 1 | | Level 2 | | Level 3 |
| Assets: | | | | | | | |
| Money market funds | $ | 22,787 | | | $ | 22,787 | | | $ | — | | | $ | — | |
| U.S. treasury bills | 20,221 | | | 20,221 | | | — | | | — | |
| $ | 43,008 | | | $ | 43,008 | | | $ | — | | | $ | — | |
| | | | | | | |
| Liabilities: | | | | | | | |
| Common stock warrant liabilities | $ | 252,178 | | | $ | 126,898 | | | $ | 125,280 | | | $ | — | |
| | | | | | | |
| |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Money market funds and U.S. treasury bills
The money market funds and U.S. treasury bills are classified within Level 1 as these securities are traded on an active public market.
Common stock warrant liabilities
The Warrants were accounted for as a liability in accordance with ASC Topic 815, Derivatives and Hedging (see Note 10). The warrant liability was measured at fair value upon assumption and on a recurring basis, with changes in fair value presented in the consolidated statements of operations.
The Company used Level 1 inputs for valuing the Public Warrants and Level 2 inputs for valuing the Private Warrants. The Private Warrants are substantially similar to the Public Warrants, but not directly traded or quoted on an active market. See Note 10 for additional information on the Company’s Warrants.
The following table presents the changes in the fair value of warrant liability:
| | | | | | | | | |
| | | | | Total Warrant Liability |
| | | | | |
| | | | | |
| Fair value as of December 31, 2023 | | | | | 67,622 | |
| Change in fair value of warrant liability | | | | | 184,557 | |
| Exercise of Warrants | | | | | (1) | |
| Fair value as of December 31, 2024 | | | | | 252,178 | |
| Change in fair value of warrant liability | | | | | (9,905) | |
| Exercise and redemption of Warrants | | | | | (242,273) | |
| Fair value as of December 31, 2025 | | | | | $ | — | |
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.