Mereo BioPharma Group plc Fair Value Disclosure
4. Fair value measurement
The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above:
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As of December 31, 2025 |
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Total |
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Level 1 |
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Level 2 |
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Level 3 |
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($'000) |
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($'000) |
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($'000) |
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($'000) |
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Financial assets |
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Cash equivalents (investments in money market funds) |
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22,749 |
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— |
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22,749 |
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— |
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Financial liabilities |
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Warrant liabilities |
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38 |
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— |
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38 |
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— |
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As of December 31, 2024 |
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Total |
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Level 1 |
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Level 2 |
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Level 3 |
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($'000) |
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($'000) |
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($'000) |
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($'000) |
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Financial liabilities |
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Warrant liabilities |
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821 |
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— |
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821 |
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— |
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There were no transfers between any levels of the fair value hierarchy during the years ended December 31, 2025 and 2024.
Fair values of the investments in money market funds are determined based on the net asset value per share of each fund stated in the fund manager's statement.
As of December 31, 2025 and 2024, warrant liabilities solely related to warrants outstanding to the former lenders of the Company as described in Note 11.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Mar 27, 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.