Sionna Therapeutics, Inc. Fair Value Disclosure
| December 31, 2025 | |||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| Money market funds | $ | 51,962 | $ | 51,962 | $ | — | $ | — | |||||||||||||||
| Commercial paper | 5,988 | — | 5,988 | — | |||||||||||||||||||
| Marketable securities: | |||||||||||||||||||||||
U.S. Treasury securities | 192,065 | 192,065 | — | — | |||||||||||||||||||
| Commercial paper | 24,396 | — | 24,396 | — | |||||||||||||||||||
| Government agency securities | 23,575 | — | 23,575 | — | |||||||||||||||||||
| Corporate debt | 11,815 | — | 11,815 | — | |||||||||||||||||||
| Total financial assets | $ | 309,801 | $ | 244,027 | $ | 65,774 | $ | — | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| Money market funds | $ | 37,288 | $ | 37,288 | $ | — | $ | — | |||||||||||||||
Marketable securities: | |||||||||||||||||||||||
U.S. Treasury securities | 70,679 | 70,679 | — | — | |||||||||||||||||||
| Government agency securities | 36,415 | — | 36,415 | — | |||||||||||||||||||
| Corporate debt | 17,227 | — | 17,227 | — | |||||||||||||||||||
| Commercial paper | 5,934 | — | 5,934 | — | |||||||||||||||||||
Total financial assets | $ | 167,543 | $ | 107,967 | $ | 59,576 | $ | — | |||||||||||||||
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.