Taysha Gene Therapies, Inc. Fair Value Disclosure
Note 3—Fair Value Measurements
The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds, the Trinity Term Loans, a success fee derivative liability and certain of the Company’s warrant liabilities.
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):
|
December 31, 2025 |
|
|||||||||||||
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents – money market funds |
$ |
317,127 |
|
|
$ |
317,127 |
|
|
$ |
— |
|
|
$ |
— |
|
Total assets |
$ |
317,127 |
|
|
$ |
317,127 |
|
|
$ |
— |
|
|
$ |
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Trinity Term Loans |
$ |
50,106 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
50,106 |
|
Success Fee Derivative liabilities |
|
1,552 |
|
|
|
— |
|
|
|
— |
|
|
|
1,552 |
|
Total liabilities |
$ |
51,658 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
51,658 |
|
|
December 31, 2024 |
|
|||||||||||||
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents – money market funds |
$ |
138,308 |
|
|
$ |
138,308 |
|
|
$ |
— |
|
|
$ |
— |
|
Total assets |
$ |
138,308 |
|
|
$ |
138,308 |
|
|
$ |
— |
|
|
$ |
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Trinity Term Loans |
$ |
43,942 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
43,942 |
|
Success Fee Derivative liability |
|
930 |
|
|
|
— |
|
|
|
— |
|
|
|
930 |
|
SSI Warrant liability |
|
438 |
|
|
|
— |
|
|
|
— |
|
|
|
438 |
|
Total liabilities |
$ |
45,310 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
45,310 |
|
The Company classifies its money market funds, which are valued based on quoted market prices in an active market with no valuation adjustment, as Level 1 assets within the fair value hierarchy.
The Company’s Trinity Term Loans and Success Fee liabilities are classified as Level 3 measurements under the fair value hierarchy as the fair values were determined based on significant inputs not observable in the market. The fair values were determined utilizing a probability-weighted income approach, including variables for the timing of a success event and other probability estimates. See Note 6 for additional information on the Trinity Term Loans and Success Fees (as defined below).
The Company’s SSI Warrant liability was classified as Level 3 measurements under the fair value hierarchy as the fair values were determined based on significant inputs not observable in the market. The fair values were determined using the Black-Scholes-Merton option pricing model to determine the fair value of the SSI Warrants (as defined below). In December 2025, all outstanding liability classified warrants were exercised. See Note 10 for additional information on the SSI Warrants.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Mar 19, 2024 | |
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.