Lexeo Therapeutics, Inc. Fair Value Disclosure
3. Fair Value Measurements
The Company’s cash equivalents consist of investments in U.S. government money market funds stated at carrying value, which approximates fair value and is based on quoted prices in active markets for identical securities. Cash is stated at carrying value, which approximates fair value due to its short-term nature. The Company classifies its investments in U.S. Treasury securities as Level 2 assets as these assets are not traded in an active market and have been valued through a third-party pricing service based on quoted prices for similar assets. The carrying values of the Company’s prepaid expenses, other current assets, accounts payable and accrued expenses approximate their fair values due to their short-term nature.
The following table presents information about the Company’s financial assets and investments measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values:
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As of 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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Total |
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Assets: |
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|
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|
|
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Cash equivalents (money market) |
|
$ |
40,178 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
40,178 |
|
Current portion of investments in U.S. Treasury securities |
|
|
- |
|
|
|
118,767 |
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|
|
- |
|
|
|
118,767 |
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Investments: |
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|
|
|
|
|
|
|
|
|
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Non-current portion of investments in U.S. Treasury securities |
|
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- |
|
|
|
64,801 |
|
|
|
- |
|
|
|
64,801 |
|
|
|
$ |
40,178 |
|
|
$ |
183,568 |
|
|
$ |
- |
|
|
$ |
223,746 |
|
|
|
As of 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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Total |
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Assets: |
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|
|
|
|
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|
|
|
|
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Cash equivalents (money market) |
|
$ |
17,636 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
17,636 |
|
Current portion of investments in U.S. Treasury securities |
|
|
- |
|
|
|
86,504 |
|
|
|
- |
|
|
|
86,504 |
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Investments: |
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|
|
|
|
|
|
|
|
|
|
|
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Non-current portion of investments in U.S. Treasury securities |
|
|
- |
|
|
|
7,012 |
|
|
|
- |
|
|
|
7,012 |
|
|
|
$ |
17,636 |
|
|
$ |
93,516 |
|
|
$ |
- |
|
|
$ |
111,152 |
|
Investments in U.S. Treasury securities, which are classified as available-for-sale securities, consisted of the following as of December 31, 2025 and December 31, 2024:
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As of December 31, 2025: |
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Amortized Cost Basis |
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Gross Unrealized Gains |
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Gross Unrealized Losses |
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Fair Value |
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Available-for-sale securities: |
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|
|
|
|
|
|
|
|
|
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U.S. Treasury securities |
|
$ |
183,380 |
|
|
$ |
188 |
|
|
$ |
- |
|
|
$ |
183,568 |
|
|
|
$ |
183,380 |
|
|
$ |
188 |
|
|
$ |
- |
|
|
$ |
183,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
As of December 31, 2024: |
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|
|
Amortized Cost Basis |
|
|
Gross Unrealized Gains |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
||||
Available-for-sale securities: |
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|
|
|
|
|
|
|
|
|
|
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U.S. Treasury securities |
|
$ |
93,619 |
|
|
$ |
- |
|
|
$ |
(103 |
) |
|
$ |
93,516 |
|
|
|
$ |
93,619 |
|
|
$ |
- |
|
|
$ |
(103 |
) |
|
$ |
93,516 |
|
All investments in U.S. Treasury securities classified as available-for-sale securities held as of December 31, 2025 and December 31, 2024 had contractual maturities of less than one year for the current portion of investments in U.S. Treasury securities and between one to two years for the non-current portion of investments in U.S. Treasury securities. There have been no material realized gains or losses on investments classified as available-for-sale securities for the periods presented.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 30, 2026 | Showing above |
| 2024 | Mar 24, 2025 | |
| 2023 | Mar 11, 2024 | |
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.