Korro Bio, Inc. Fair Value Disclosure
3. Fair Value Measurements
Recurring Fair Value Measurements
The Company measures the fair value of money market funds based on quoted prices in active markets for identical securities. Marketable securities include U.S. treasury bills and U.S. government agency securities that are valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.
The carrying amounts reflected in the consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values, due to their short-term nature.
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 were as follows (in thousands):
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Total |
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Quoted Prices |
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|
Significant |
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|
Significant |
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Financial assets |
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|
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|
|
|
|
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Cash equivalents: |
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Money market funds |
|
$ |
21,377 |
|
|
$ |
21,377 |
|
|
$ |
— |
|
|
$ |
— |
|
Marketable securities |
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|
|
|
|
|
|
|
|
|
|
|
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U.S. government agency securities |
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|
63,363 |
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|
|
— |
|
|
|
63,363 |
|
|
|
— |
|
MS APA asset |
|
|
1,481 |
|
|
|
— |
|
|
|
— |
|
|
|
1,481 |
|
Total financial assets |
|
$ |
86,221 |
|
|
$ |
21,377 |
|
|
$ |
63,363 |
|
|
$ |
1,481 |
|
|
|
|
|
|
|
|
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|
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Financial liabilities |
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CVR liability |
|
$ |
1,481 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,481 |
|
Total financial liabilities |
|
$ |
1,481 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,481 |
|
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 were as follows (in thousands):
|
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Total |
|
|
Quoted Prices |
|
|
Significant |
|
|
Significant |
|
||||
Financial assets |
|
|
|
|
|
|
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||||
Cash equivalents: |
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|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
55,155 |
|
|
$ |
55,155 |
|
|
$ |
— |
|
|
$ |
— |
|
Marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. treasury bills |
|
|
22,238 |
|
|
|
— |
|
|
|
22,238 |
|
|
|
— |
|
U.S. government agency securities |
|
|
85,173 |
|
|
|
— |
|
|
|
85,173 |
|
|
|
— |
|
MS APA asset |
|
|
1,472 |
|
|
|
— |
|
|
|
— |
|
|
|
1,472 |
|
Total financial assets |
|
$ |
164,038 |
|
|
$ |
55,155 |
|
|
$ |
107,411 |
|
|
$ |
1,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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||||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CVR liability |
|
$ |
1,472 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,472 |
|
Total financial liabilities |
|
$ |
1,472 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,472 |
|
The fair value of the CVR liability and the MS APA are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. In determining the fair value of the CVR liability and the MS APA asset, the Company used the income approach, primarily discounted cash flow models. The discounted cash flow models require the use of significant judgment, estimates and assumptions, including the probability of technical and regulatory success, and discount rates. For the year ended December 31, 2025, the aggregate change in fair value of the CVR liability and MS APA asset was $0.1 million. For the year ended December 31, 2024, the aggregate change in fair value of the CVR liability and MS APA asset was $0.1 million.
There were no changes in valuation techniques, nor were there any transfers among the fair value hierarchy levels during the years ended December 31, 2025 or 2024.
Nonrecurring Fair Value Measurements
The Company determined that indicators of impairment existed during the fourth quarter of 2025 and, as a result, the Company's long-lived assets were reviewed for impairment. The Company assessed the recoverability of its single enterprise-wide asset group and determined that the assets were not fully recoverable when compared to the future undiscounted cash flows from the asset group. As a result, the Company estimated the fair value of the asset group which resulted in a non-cash, long-lived
asset impairment charge of $30.9 million in 2025. The asset impairment charge was recorded as Long-lived asset impairment charge in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2025. The $30.9 million consists of $15.0 million and $15.9 million of impairment charges on the Company's operating ROU asset and property and equipment, respectively. The impairment charge was allocated to the long-lived assets of the asset group on a pro rata basis using the relative carrying amount of those assets. The fair value of the single enterprise-wide asset group was calculated using the Company’s market capitalization at the date the impairment indicators were identified using Level 1 inputs.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 18, 2025 | |
| 2023 | Mar 26, 2024 | |
| 2022 | Mar 10, 2023 | |
| 2021 | Mar 15, 2022 | |
| 2020 | Mar 29, 2021 | |
| 2019 | Mar 26, 2020 | |
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.