Fair Value Measurements

3 Months Ended

Mar. 31, 2026

The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Company uses the following hierarchy to classify inputs used in measuring fair value:

Level 1Quoted prices in active markets for identical assets or liabilities.

Level 2Observable inputs other than Level 1

Level 3Unobservable inputs

The Company measures fair value using the market approach based on observable market data for identical or comparable instruments.

The following tables summarize the Company’s financial assets (cash equivalents and marketable securities) at fair value:


	March 31, 2026		Basis for Fair Value Measurements
(in thousands)			Level 1		Level 2		Level 3

Money market funds, included in cash and cash equivalents	$	11,730	$	11,730	$	—	$	—
Fixed income mutual fund, included in short-term investments	39,202		39,202		—		—
Total	$	50,932	$	50,932	$	—	$	—


	December 31, 2025		Basis for Fair Value Measurements
(in thousands)			Level 1		Level 2		Level 3

Money market funds, included in cash and cash equivalents	$	18,965	$	18,965	$	—	$	—
Fixed income mutual fund, included in short-term investments	39,366		39,366		—		—
Total	$	58,331	$	58,331	$	—	$	—

There were no liabilities measured at fair value on a recurring and non-recurring basis as of March 31, 2026 and December 31, 2025.

The money market funds are highly liquid and primarily invest in short-term fixed income securities issued by the U.S. government and U.S. government agencies.

The fixed income mutual fund is a short-term investment which primarily invests in debt securities issued by the U.S. government and U.S. government agencies and corporate bonds and notes. Interest income from short-term investment is recorded in interest income. During the three months ended March 31, 2026 and 2025, the Company recognized $0.2 million and $0.1 million in unrealized losses from its short-term investment, respectively. The Company’s short-term investment had a cumulative unrealized net gain of $0.0 million and $0.2 million as of March 31, 2026 and December 31, 2025, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

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+ Details

NeuroPace Inc 10-Q