Larimar Therapeutics, Inc. Fair Value Disclosure
Fair Value Measurements
The Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024 are measured in accordance with the standards of ASC 820, Fair Value Measurements and Disclosures, which establishes a three-level valuation hierarchy for measuring fair value and expands financial statement disclosures about fair value measurements. The valuation hierarchy is based on upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
Level – 1 |
Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
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Level – 2 |
Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
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Level – 3 |
Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, accounts payable and accrued liabilities. For accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of December 31, 2025 and 2024 were considered representative of their fair values due to their short term to maturity.
The following tables summarize the Company’s cash equivalents and marketable securities as of December 31, 2025 and 2024:
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Total |
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Quoted |
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Significant |
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Significant |
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(in thousands) |
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December 31, 2025 |
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Cash equivalents: |
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Money market funds invested in government securities |
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$ |
78,930 |
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$ |
78,930 |
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$ |
— |
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$ |
— |
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Total cash equivalents |
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78,930 |
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78,930 |
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— |
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— |
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Marketable securities: |
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U.S. Government securities |
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51,440 |
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— |
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51,440 |
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— |
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Total marketable securities |
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51,440 |
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— |
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51,440 |
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— |
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Total cash equivalents and marketable securities |
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$ |
130,370 |
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$ |
78,930 |
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$ |
51,440 |
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$ |
— |
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December 31, 2024 |
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Cash equivalents: |
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Money market funds invested in government securities |
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$ |
26,702 |
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$ |
26,702 |
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$ |
— |
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$ |
— |
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Total cash equivalents |
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26,702 |
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26,702 |
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— |
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— |
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Marketable securities: |
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U.S. Treasury Bills |
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2,947 |
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2,947 |
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— |
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— |
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U.S. Government securities |
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147,289 |
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— |
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147,289 |
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— |
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Total marketable securities |
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150,236 |
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2,947 |
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147,289 |
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— |
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Total cash equivalents and marketable securities |
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$ |
176,938 |
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$ |
29,649 |
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$ |
147,289 |
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$ |
— |
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The accrued interest receivable related to the Company’s investments was $0.7 million and $1.1 million as of December 31, 2025 and 2024, respectively, and is included in prepaid expenses and other current assets on the consolidated balance sheet.
The Company classifies its money market funds and U.S. treasury bills, which are valued based on quoted market prices in active markets with no valuation adjustment, as Level 1 assets within the fair value hierarchy.
The Company classifies its investments in U.S. government and agency securities, corporate commercial paper, and corporate bonds, if any, as Level 2 assets within the fair value hierarchy. The fair values of these investments are estimated by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.
As of December 31, 2025, the unrealized loss for available-for-sale investments were non-credit related, and the Company does not intend to sell the investments that were in an unrealized loss position, nor will it be required to sell those investments before recovery of their amortized cost basis, which may be maturity. As of December 31, 2025 and 2024, no allowances for credit losses for the Company’s investments were recorded. During the twelve months ended December 31, 2025 and 2024, the Company did not recognize any impairment losses related to investments.
As of December 31, 2025 and 2024, the Company's cash equivalents and marketable securities consisted of a U.S. government money market fund, U.S. Treasury Bills and U.S. government and agency securities, all held in our name in a separate custody account with U.S. Bank. The U.S. government money market fund has same-day liquidity access and the U.S. government and agency securities all have maturities of 360 days or less.
Marketable Securities
The following tables summarize the Company’s marketable securities as of December 31, 2025 and 2024:
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Amortized |
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Gross |
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Gross |
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Fair Value |
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(in thousands) |
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December 31, 2025 |
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Assets: |
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U.S. Government securities |
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$ |
51,386 |
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$ |
54 |
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$ |
— |
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$ |
51,440 |
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Total marketable securities |
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$ |
51,386 |
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$ |
54 |
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$ |
— |
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$ |
51,440 |
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December 31, 2024 |
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Assets: |
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U.S. Treasury Bills |
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$ |
2,945 |
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$ |
2 |
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$ |
— |
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$ |
2,947 |
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U.S. Government securities |
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147,143 |
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166 |
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(20 |
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147,289 |
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Total marketable securities |
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$ |
150,088 |
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$ |
168 |
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$ |
(20 |
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$ |
150,236 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | Mar 24, 2025 | |
| 2023 | Mar 14, 2024 | |
| 2022 | Mar 14, 2023 | |
| 2021 | Mar 25, 2022 | |
| 2020 | Mar 4, 2021 | |
| 2019 | Mar 5, 2020 | |
| 2018 | Mar 14, 2019 | |
| 2017 | Mar 9, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | Mar 15, 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.