FRACTYL HEALTH, INC. Fair Value Disclosure
3. Fair Value Measurements
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of fair value hierarchy utilized to determine such fair values:
|
|
Fair Value Measurements as of |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents—money market funds |
|
$ |
35,829 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
35,829 |
|
|
|
$ |
35,829 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
35,829 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities, long-term |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
36,410 |
|
|
$ |
36,410 |
|
Notes payable, long-term |
|
|
— |
|
|
|
— |
|
|
|
30,586 |
|
|
|
30,586 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
66,996 |
|
|
$ |
66,996 |
|
|
|
Fair Value measurements as of |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents—money market funds |
|
$ |
38,295 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
38,295 |
|
|
|
$ |
38,295 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
38,295 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities, long-term |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,336 |
|
|
$ |
1,336 |
|
Notes payable, long-term |
|
|
— |
|
|
|
— |
|
|
|
30,162 |
|
|
|
30,162 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
31,498 |
|
|
$ |
31,498 |
|
During the years ended December 31, 2025 and 2024, there were no transfers between Level 1, Level 2 and Level 3.
See Note 6—“Notes Payable” for the discussion of the fair value methodology of the notes payable and a rollforward of the fair value. See Note 8—“Warrant Liabilities” for the discussion of the fair value methodology of the common stock warrants and a rollforward of the fair value.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 24, 2026 | Showing above |
| 2024 | Mar 3, 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.