NextCure, Inc. Fair Value Disclosure
6. Fair Value Measurements
The Company has certain financial assets recorded at fair value, which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.
Level 1—Quoted market prices in active markets for identical assets or liabilities.
Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves.
Level 3—Unobservable inputs developed using estimates of assumptions developed by the Company, which reflect those that a market participant would use.
To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy as of December 31, 2025 and 2024:
December 31, 2025 | ||||||||||||
Significant | ||||||||||||
Quoted Prices in | Other | |||||||||||
Active Markets or | Observable | Significant | ||||||||||
Identical Assets | Inputs | Unobservable | ||||||||||
(in thousands) | | Total | | (Level 1) | | (Level 2) | | (Level 3) | ||||
Cash equivalents: | ||||||||||||
Money market funds | $ | 25,420 | $ | 25,420 | $ | — | $ | — | ||||
Marketable securities: | ||||||||||||
Corporate bonds | 15,836 | — | 15,836 | — | ||||||||
Total | $ | 41,256 | $ | 25,420 | $ | 15,836 | $ | — | ||||
December 31, 2024 | ||||||||||||
Significant | ||||||||||||
Quoted Prices in | Other | |||||||||||
Active Markets or | Observable | Significant | ||||||||||
Identical Assets | Inputs | Unobservable | ||||||||||
(in thousands) | | Total | | (Level 1) | | (Level 2) | | (Level 3) | ||||
Cash equivalents: | ||||||||||||
Money market funds | $ | 27,057 | $ | 27,057 | $ | — | $ | — | ||||
Marketable securities: | ||||||||||||
Corporate bonds | 32,517 | — | 32,517 | — | ||||||||
U.S. Treasury and Government agencies | 8,377 | — | 8,377 | — | ||||||||
Total | $ | 67,951 | $ | 27,057 | $ | 40,894 | $ | — | ||||
The Company did not transfer any assets measured at fair value on a recurring basis between levels during the years ended December 31, 2025 and 2024.
The carrying value of financial instruments, including trade receivables, accounts payable and accrued liabilities approximate fair value because of the short-term maturity of these items. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
| 2023 | Mar 21, 2024 | |
| 2022 | Mar 2, 2023 | |
| 2021 | Mar 3, 2022 | |
| 2020 | Mar 4, 2021 | |
| 2019 | Mar 12, 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.