Strata Critical Medical, Inc.SRTA

Strata Critical Medical, Inc. Fair Value Disclosure

10-KFiled Mar 13, 20252 min read
Fair Value Measurements
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024 and 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
LevelDecember 31, 2024December 31, 2023
Assets
Money market fund (1)1$13,751 $25,064 
$13,751 $25,064 
Liabilities
Warrant liabilities - Public Warrants
1$3,758 $3,208 
Warrant liabilities - Private Warrants
22,050 1,750 
Fair value of aggregate warrant liabilities
$5,808 $4,958 
(1) As of December 31, 2024 and 2023, the Company had cash equivalents held in a money market fund. The Company has concluded that due to the highly liquid nature of the fund, the carrying value approximates fair value, which represents a Level 1 input. The balance of cash equivalents held in the money market fund is included in cash and cash equivalents.

The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within “Warrant liability” on the Company’s consolidated balance sheets. The warrant liabilities are measured at fair value upon assumption and on a recurring basis, with changes in fair value presented within “Change in fair value of warrant liabilities” in the consolidated statements of operations.
The Public Warrants are considered part of Level 1 of the fair value hierarchy, as those securities are traded on an active public market. At May 7, 2021 and thereafter, the Company valued the Private Warrants using Level 2 of the fair value hierarchy. The Company used the value of the Public Warrants as an approximation of the value of the Private Warrants as they are substantially similar to the Public Warrants, but not directly traded or quoted on an active market.
Subsequent Measurement

The following table presents the changes in fair value of the warrant liabilities:
Public
Warrants
Private
Placement
Warrants
Total Warrant
Liability
Fair value as of January 1, 2023$4,583 $2,500 $7,083 
Change in fair value of warrant liabilities(1,375)(750)(2,125)
Fair value as of December 31, 2023
$3,208 $1,750 $4,958 
Change in fair value of warrant liabilities
550 300 850 
Fair value as of December 31, 2024
$3,758 $2,050 $5,808 

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.

Other Available Disclosures

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