Disc Medicine, Inc. Fair Value Disclosure
5. Fair Value Measurements
The following tables present information about the Company’s assets and liabilities that are measured and carried at fair value on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value, which is described further within Note 2 - Summary of Significant Accounting Policies.
Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 are summarized as follows (in thousands):
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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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Assets |
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|
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Cash equivalents: |
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|
|
|
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|
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Money market funds |
|
$ |
72,932 |
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|
$ |
— |
|
|
$ |
— |
|
Corporate debt securities |
|
|
— |
|
|
|
9,981 |
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|
|
— |
|
Total cash equivalents |
|
|
72,932 |
|
|
|
9,981 |
|
|
|
— |
|
Marketable securities: |
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|
|
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|
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|||
U.S. treasury securities |
|
|
— |
|
|
|
485,529 |
|
|
|
— |
|
Corporate debt securities |
|
|
— |
|
|
|
132,941 |
|
|
|
— |
|
U.S. government agency securities |
|
|
— |
|
|
|
81,537 |
|
|
|
— |
|
Total marketable securities |
|
|
— |
|
|
|
700,007 |
|
|
|
— |
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Total assets |
|
$ |
72,932 |
|
|
$ |
709,988 |
|
|
$ |
— |
|
Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 are summarized as follows (in thousands):
|
|
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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Assets |
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|
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Cash equivalents: |
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|
|
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|
|
|
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|||
Money market funds |
|
$ |
88,735 |
|
|
$ |
— |
|
|
$ |
— |
|
U.S. treasury securities |
|
|
— |
|
|
|
91,916 |
|
|
|
— |
|
Total cash equivalents |
|
|
88,735 |
|
|
|
91,916 |
|
|
|
— |
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|||
U.S. treasury securities |
|
|
— |
|
|
|
189,663 |
|
|
|
— |
|
U.S. government agency securities |
|
|
— |
|
|
|
107,784 |
|
|
|
— |
|
Total marketable securities |
|
|
— |
|
|
|
297,447 |
|
|
|
— |
|
Total assets |
|
$ |
88,735 |
|
|
$ |
389,363 |
|
|
$ |
— |
|
The fair value of the Company’s Level 1 cash equivalents, consisting of money market funds, is based on quoted market prices in active markets with no valuation adjustment. The fair value of the Company’s Level 2 cash equivalents consisting of U.S. treasury
and corporate debt securities with original maturities of three months or less and marketable securities consisting of U.S. treasury, U.S. government agency, and corporate debt securities with original maturities 24 months or less, are determined through third-party pricing services. The amortized cost of cash equivalents approximates the fair value.
There were no impairments of the Company’s assets measured and carried at fair value during the years ended December 31, 2025, 2024 and 2023. In addition, there were no changes in valuation techniques during the years ended December 31, 2025 and 2024. There were no transfers between Level 1, Level 2 and Level 3 financial assets during the year ended December 31, 2025. The Company transferred assets of $0.9 million from Level 2 to Level 1 during the year ended December 31, 2024. The Company did not have any non-recurring fair value measurements on any assets or liabilities during the years ended December 31, 2025 and 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 21, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 10, 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.