Fair Value MeasurementsThe following table presents information about the Company’s financial assets measured at fair value on a recurring basis based on the fair value hierarchy as follows (in thousands):
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| As of December 31, 2025 |
| Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | | | | | | | |
| Cash and cash equivalents | | | | | | | |
| Money market funds | $ | 206,018 | | | $ | - | | | $ | - | | | $ | 206,018 | |
| Total | $ | 206,018 | | | $ | - | | | $ | - | | | $ | 206,018 | |
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| As of December 31, 2024 |
| Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | | | | | | | |
| Cash and cash equivalents | | | | | | | |
| Money market funds | $ | 64,501 | | | $ | - | | | $ | - | | | $ | 64,501 | |
| Total | 64,501 | | | - | | | - | | | 64,501 | |
| Liabilities | | | | | | | |
| Warrant liabilities | - | | | - | | | 2,252 | | | 2,252 | |
| Total | $ | - | | | $ | - | | | $ | 2,252 | | | 2,252 | |
Level 3 liabilities that are measured at fair value on a recurring basis consist of redeemable convertible preferred stock warrant liabilities and common stock warrant liabilities associated with warrants issued in connection with the Company’s financing arrangements (refer to Note 6 and Note 8 for additional information). The Company’s previously outstanding Series B redeemable convertible preferred stock warrants were automatically cashless exercised on May 19, 2025, and the Company’s previously outstanding Series D redeemable convertible preferred stock warrants were cashless exercised on June 9, 2025. The shares of Series B and Series D redeemable convertible preferred stock issued in connection with such warrant exercises were subsequently converted into shares of the Company’s common stock in connection with the IPO on June 9, 2025. Accordingly, no preferred stock warrant liabilities remained outstanding as of December 31, 2025.
The Company’s previously outstanding common stock warrants were cashless exercised on July 18, 2025 into shares of the Company’s common stock (see Note 8 for additional information).
The following tables present the quantitative information regarding Level 3 fair value measurements of the warrant liabilities:
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| As of December 31, 2024 |
| Series B | | Series D | | Common |
| Stock price | $ | 3.41 | | | $ | 4.55 | | | $ | 7.68 | |
| Exercise price | $ | 1.18 | | | $ | 5.04 | | | $ | 3.24 | |
| Remaining term (in years) | 1.0 | | 5.4 | | 2.7 |
| Risk-free interest rate | 4.21 | % | | 4.38 | % | | 4.27 | % |
| Expected volatility | 67 | % | | 66 | % | | 66 | % |
| Expected dividend yield | 0 | % | | 0 | % | | 0 | % |
The following table sets forth a summary of changes in fair value of Level 3 liabilities (in thousands):
| | | | | |
| Balance as of December 31, 2023 | $ | 2,470 | |
| Remeasurement of warrant liabilities | (218) | |
| Balance as of December 31, 2024 | 2,252 | |
| Remeasurement of warrant liabilities | 1,468 | |
| Cashless exercise of redeemable convertible preferred stock warrants | (3,078) | |
| Cashless exercise of outstanding common stock warrants | (642) | |
| Balance as of December 31, 2025 | — | |
The Company recognizes transfers among Level 1, Level 2, and Level 3 classifications as of the actual date of the events or change in circumstances that caused the transfers. There were no transfers between fair value measurement levels during the periods presented.
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.