INOVIO PHARMACEUTICALS, INC.INO
INOVIO PHARMACEUTICALS, INC. Fair Value Disclosure
Short-term Investments and Fair Value Measurements
The following is a summary of available-for-sale securities as of December 31, 2025 and 2024:
| As of December 31, 2025 | |||||||||||||||||||||||||||||
| Contractual Maturity (in years) | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | |||||||||||||||||||||||||
| Mutual funds | --- | $ | 10,771,176 | $ | — | $ | (330,925) | $ | 10,440,251 | ||||||||||||||||||||
| Certificates of deposit | Less than 1 | 2,981,626 | 7,796 | (261) | 2,989,161 | ||||||||||||||||||||||||
| U.S. agency mortgage-backed securities | * | 1,198,722 | — | (388,989) | 809,733 | ||||||||||||||||||||||||
| $ | 14,951,524 | $ | 7,796 | $ | (720,175) | $ | 14,239,145 | ||||||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||||||||
| Contractual Maturity (in years) | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | |||||||||||||||||||||||||
| Mutual funds | --- | $ | 25,926,415 | $ | — | $ | (1,445,706) | $ | 24,480,709 | ||||||||||||||||||||
| Certificates of deposit | Less than 1 | 2,980,273 | 9,750 | (281) | 2,989,742 | ||||||||||||||||||||||||
| U.S. agency mortgage-backed securities | * | 1,260,745 | — | (430,964) | 829,781 | ||||||||||||||||||||||||
| $ | 30,167,433 | $ | 9,750 | $ | (1,876,951) | $ | 28,300,232 | ||||||||||||||||||||||
*No single maturity date.
During the years ended December 31, 2025 and 2024, the Company recorded gross realized gain on investments of $1,000 and $900, respectively, and gross realized loss on investments of $892,000 and $1.9 million, respectively. During the years ended December 31, 2025 and 2024, the Company recorded net unrealized gain on available-for-sale equity securities of $1.1 million and $2.1 million, respectively. No material balances were reclassified out of accumulated other comprehensive loss for the years ended December 31, 2025 and 2024. Interest and dividends on investments classified as available-for-sale are included in interest income in the consolidated statements of operations. As of December 31, 2025, the Company had 11 available-for-sale securities with an aggregate total unrealized loss of $720,000. All of the securities had been in a loss position for longer than 12 months as of December 31, 2025.
The Company periodically reviews its portfolio of available-for-sale debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns. For the debt securities where the fair value of the investment is less than the amortized cost basis, the Company has assessed at the individual security level for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment. Unrealized losses on available-for-sale debt securities as of December 31, 2025 were primarily due to changes in interest rates, and not due to increased credit risks associated with specific securities. Based on the credit quality of the available-for-sale debt securities that are in an unrealized loss position, and the Company’s estimates of future cash flows to be collected from those securities, the Company believes the unrealized losses are not credit losses. Accordingly, at December 31, 2025, the Company has not recorded an allowance for credit losses related to its available-for-sale debt securities.
The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis, determined using the following inputs as of December 31, 2025:
| Fair Value Measurements at | |||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Total | Quoted Prices in Active Markets (Level 1) | Significant Other Unobservable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||
| Mutual funds | $ | 10,440,251 | $ | 10,440,251 | $ | — | $ | — | |||||||||||||||
| Certificates of deposit | 2,989,161 | — | 2,989,161 | — | |||||||||||||||||||
| U.S. agency mortgage-backed securities | 809,733 | — | 809,733 | — | |||||||||||||||||||
| Total short-term investments | 14,239,145 | 10,440,251 | 3,798,894 | — | |||||||||||||||||||
| Investment in affiliated entity | 2,103,688 | 2,103,688 | — | — | |||||||||||||||||||
| Total assets measured at fair value | $ | 16,342,833 | $ | 12,543,939 | $ | 3,798,894 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Common stock warrant liabilities | $ | 29,067,162 | $ | — | $ | — | $ | 29,067,162 | |||||||||||||||
| Total liabilities | $ | 29,067,162 | $ | — | $ | — | $ | 29,067,162 | |||||||||||||||
The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis, determined using the following inputs as of December 31, 2024:
| Fair Value Measurements at | |||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Total | Quoted Prices in Active Markets (Level 1) | Significant Other Unobservable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||
| Mutual funds | $ | 24,480,709 | $ | 24,480,709 | $ | — | $ | — | |||||||||||||||
| Certificates of deposit | 2,989,742 | — | 2,989,742 | — | |||||||||||||||||||
| U.S. agency mortgage-backed securities | 829,781 | — | 829,781 | — | |||||||||||||||||||
| Total short-term investments | 28,300,232 | 24,480,709 | 3,819,523 | — | |||||||||||||||||||
| Investments in affiliated entity | 1,613,844 | 1,613,844 | — | — | |||||||||||||||||||
| Total assets measured at fair value | $ | 29,914,076 | $ | 26,094,553 | $ | 3,819,523 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Common stock warrant liability | $ | 13,255,188 | $ | — | $ | — | $ | 13,255,188 | |||||||||||||||
| Total liabilities | $ | 13,255,188 | $ | — | $ | — | $ | 13,255,188 | |||||||||||||||
Level 1 assets at December 31, 2025 and 2024 consisted of mutual funds and the Company’s investment in its affiliated entity, PLS. The Company accounts for its investment in 597,808 common shares of PLS based on the closing price of the shares on the Korea New Exchange Market on the applicable balance sheet date. Unrealized gains and losses on the Company's equity securities are reported in the consolidated statement of operations as unrealized gain or loss on available-for-sale equity securities or as a gain or loss on investment in affiliated entity.
Level 2 assets at December 31, 2025 and 2024 consisted of certificates of deposit and U.S. agency mortgage-backed securities held by the Company that are initially valued at the transaction price and subsequently valued, at the end of each reporting period, typically utilizing market observable data. The Company obtains the fair value of its Level 2 assets from a
professional pricing service, which may use quoted market prices for identical or comparable instruments, or inputs other than quoted prices that are observable either directly or indirectly. The professional pricing service gathers quoted market prices and observable inputs from a variety of industry data providers. The valuation techniques used to measure the fair value of the Company's Level 2 financial instruments were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. The Company validates the quoted market prices provided by the primary pricing service by comparing the service's assessment of the fair values of the Company's investment portfolio balance against the fair values of the Company's investment portfolio balance obtained from an independent source.
There were no Level 3 assets held as of December 31, 2025 or 2024.
Level 3 liabilities held as of December 31, 2025 consisted of liabilities associated with the December 2024 and July 2025 Warrants to purchase common stock. Level 3 liabilities held as of December 31, 2024 consisted of liabilities associated with the December 2024 Warrants to purchase common stock. See Note 7 for additional information about the liability-classified warrants.
The Company reassesses the fair value of the common stock warrant liability at each reporting date utilizing a Black-Scholes pricing model.
The following assumptions were used to estimate the fair value of the warrant liability of the July 2025 Series A Warrants:
| On Issuance Date | December 31, 2025 | ||||||||||
| Risk-free interest rate | 4.3% | 3.7% | |||||||||
| Expected volatility | 96% | 127% | |||||||||
| Expected life in years | 0.6 | 0.08 | |||||||||
| Dividend yield | — | — | |||||||||
The following assumptions were used to estimate the fair value of the warrant liability of the July 2025 Series B Warrants:
| On Issuance Date | December 31, 2025 | ||||||||||
| Risk-free interest rate | 3.9% | 3.7% | |||||||||
| Expected volatility | 94% | 88% | |||||||||
| Expected life in years | 5 | 4.5 | |||||||||
| Dividend yield | — | — | |||||||||
The following assumptions were used to estimate the fair value of the warrant liability of the December 2024 Warrants:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Risk-free interest rate | 3.6% | 4.4% | |||||||||
| Expected volatility | 91% | 111% | |||||||||
| Expected life in years | 4 | 5 | |||||||||
| Dividend yield | — | — | |||||||||
Changes in these assumptions as well as fluctuations in the Company's stock price between the valuation dates can have a
significant impact on the fair value of the common stock warrant liability. Expected volatility was based on historical volatility. Historical volatility was computed using daily pricing observations for recent periods. The Company believes this method produced an estimate that was representative of the Company’s expectations of future volatility over the expected term. Expected term is calculated based on the remaining contractual term of the December 2024 and July 2025 Warrants or best estimate of this term. The risk-free rate was based on the U.S. Treasury rate that corresponds to the expected term of the December 2024 and July 2025 Warrants. As a result of these calculations, the Company recorded a decrease in fair value of the liability of $493,000 and $2.8 million on the consolidated statement of operations for the years ended December 31, 2025 and 2024, respectively. Upon exercise of the December 2024 and July 2025 Warrants, the fair value of the warrant liability will be reclassified from liabilities into stockholders' equity immediately prior to exercise.
The following table presents the changes in fair value of the Company’s total Level 3 financial liabilities for the year ended December 31, 2025:
| Common Stock Warrant Liabilities | |||||
| Balance at December 31, 2024 | $ | 13,255,188 | |||
| Issuance of Series A common stock warrants in July 2025 | 3,779,879 | ||||
| Issuance of Series B common stock warrants in July 2025 | 13,206,951 | ||||
| Increase in fair value of Series A common stock warrants issued in July 2025 | 196,721 | ||||
| Increase in fair value of Series B common stock warrants issued in July 2025 | 3,597,442 | ||||
| (4,287,394) | |||||
| Change in classification from liability to stockholders equity due to warrant exercise | (681,625) | ||||
| Balance at December 31, 2025 | $ | 29,067,162 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 18, 2025 | |
| 2023 | Mar 6, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 12, 2020 | |
| 2018 | Mar 12, 2019 | |
| 2017 | Mar 14, 2018 | |
| 2016 | Mar 15, 2017 | |
| 2015 | Mar 14, 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.