Personalis, Inc. Fair Value Disclosure
Note 5. Fair Value Measurements
The following tables show financial assets and liabilities measured at fair value on a recurring basis and the level of inputs used in such measurements as of December 31, 2025 and 2024 (in thousands):
|
|
December 31, 2025 |
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|
|
Adjusted Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Fair Value Level |
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Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cash |
|
$ |
4,919 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,919 |
|
|
|
Money market funds |
|
|
45,349 |
|
|
|
— |
|
|
|
— |
|
|
|
45,349 |
|
|
Level 1 |
Commercial paper |
|
|
498 |
|
|
|
— |
|
|
|
— |
|
|
|
498 |
|
|
Level 1 |
Commercial paper |
|
|
73,491 |
|
|
|
— |
|
|
|
(12 |
) |
|
|
73,479 |
|
|
Level 2 |
Total cash and cash equivalents |
|
|
124,257 |
|
|
|
— |
|
|
|
(12 |
) |
|
|
124,245 |
|
|
|
Short-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
498 |
|
|
|
— |
|
|
|
— |
|
|
|
498 |
|
|
Level 1 |
Commercial paper |
|
|
12,734 |
|
|
|
— |
|
|
|
(2 |
) |
|
|
12,732 |
|
|
Level 2 |
Corporate debt securities |
|
|
4,680 |
|
|
|
1 |
|
|
|
(2 |
) |
|
|
4,679 |
|
|
Level 1 |
U.S. agency securities |
|
|
14,138 |
|
|
|
1 |
|
|
|
(5 |
) |
|
|
14,134 |
|
|
Level 2 |
U.S. government securities |
|
|
83,573 |
|
|
|
92 |
|
|
|
— |
|
|
|
83,665 |
|
|
Level 2 |
Total short-term investments |
|
|
115,623 |
|
|
|
94 |
|
|
|
(9 |
) |
|
|
115,708 |
|
|
|
Total assets measured at fair value |
|
$ |
239,880 |
|
|
$ |
94 |
|
|
$ |
(21 |
) |
|
$ |
239,953 |
|
|
|
|
|
December 31, 2024 |
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|
|
Adjusted Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Fair Value Level |
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash |
|
$ |
1,152 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,152 |
|
|
|
Money market funds |
|
|
44,524 |
|
|
|
— |
|
|
|
— |
|
|
|
44,524 |
|
|
Level 1 |
Commercial paper |
|
|
39,291 |
|
|
|
— |
|
|
|
(6 |
) |
|
|
39,285 |
|
|
Level 2 |
U.S. agency securities |
|
|
6,453 |
|
|
|
1 |
|
|
|
— |
|
|
|
6,454 |
|
|
Level 2 |
Total cash and cash equivalents |
|
|
91,420 |
|
|
|
1 |
|
|
|
(6 |
) |
|
|
91,415 |
|
|
|
Short-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
8,697 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
8,697 |
|
|
Level 2 |
Corporate debt securities |
|
|
498 |
|
|
|
— |
|
|
|
— |
|
|
|
498 |
|
|
Level 2 |
U.S. agency securities |
|
|
2,330 |
|
|
|
— |
|
|
|
— |
|
|
|
2,330 |
|
|
Level 2 |
U.S. government securities |
|
|
82,042 |
|
|
|
33 |
|
|
|
(6 |
) |
|
|
82,069 |
|
|
Level 2 |
Total short-term investments |
|
|
93,567 |
|
|
|
34 |
|
|
|
(7 |
) |
|
|
93,594 |
|
|
|
Total assets measured at fair value |
|
$ |
184,987 |
|
|
$ |
35 |
|
|
$ |
(13 |
) |
|
$ |
185,009 |
|
|
|
The amortized costs and fair value of marketable debt securities (excluding cash and money market funds), by contractual maturity, at December 31, 2025 are as follows (in thousands):
|
|
December 31, 2025 |
|
|||||
|
|
Amortized Cost |
|
|
Fair Value |
|
||
Less than 1 year |
|
$ |
185,633 |
|
|
$ |
185,702 |
|
1 to 5 years |
|
|
3,979 |
|
|
|
3,983 |
|
Total |
|
$ |
189,612 |
|
|
$ |
189,685 |
|
Unrealized losses have not been recognized as losses in the consolidated statements of operations as the Company neither intends to sell, nor anticipates that it is more likely than not that the Company will be required to sell the securities before recovery of their amortized cost basis. The declines in fair value are due primarily to changes in market interest rates, rather than credit losses.
Tempus Warrants
The Black-Scholes option-pricing model was used to estimate fair value of the warrants issued to Tempus at the date of issuance, November 28, 2023, and at each subsequent balance sheet date prior to their exercises in full in August 2024. Assumptions used are listed below, which are Level 3 fair value inputs. Expected term is equal to the remaining contractual periods of each of the two warrants. Expected volatility was based on the Company's actual historical volatility over the expected terms of the warrants. The risk-free interest rate was based on the U.S. Treasury yield curve over the expected term of the warrants. Refer to Note 8, Related Party Transactions, for further information about the warrants issued to Tempus.
|
|
As of December 31, |
|
|
|
|
2024 |
|
|
Expected term (in years) |
|
0.50 - 1.75 |
|
|
Volatility |
|
79.67% - 106.3% |
|
|
Risk-free interest rate |
|
4.70% - 5.33% |
|
|
Dividend yield |
|
–% |
|
|
Total fair value of Tempus Warrants (in thousands) |
|
$ |
- |
|
The following table sets forth a summary of the changes in fair value of the Company's Level 3 financial instruments (in thousands):
|
|
Year ended December 31, |
|
|
Warrant Liabilities |
|
2024 |
|
|
Beginning balance |
|
$ |
10,027 |
|
Change in fair value—recognized as loss within Other income (expense), net in the consolidated statements of operations |
|
|
18,274 |
|
Derecognition of warrant liabilities due to exercise in full |
|
|
(28,301 |
) |
Ending balance |
|
$ |
- |
|
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.