4. Fair Value Measurements and Disclosures

The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis by level within the valuation hierarchy (in thousands):


	September 30, 2025
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	406,977	$	—	$	—	$	406,977
Total cash equivalents	$	406,977	$	—	$	—	$	406,977
Marketable securities:
Treasury bills	$	7,981	$	—	$	—	$	7,981
Commercial paper		—		18,590		—		18,590
Corporate debt securities		—		32,973		—		32,973
Total marketable securities	$	7,981	$	51,563	$	—	$	59,544
Total assets	$	414,958	$	51,563	$	—	$	466,521


	December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	30,666	$	—	$	—	$	30,666
Total cash equivalents	$	30,666	$	—	$	—	$	30,666
Marketable securities:
Treasury bills	$	30,932	$	—	$	—	$	30,932
Commercial paper		—		5,876		—		5,876
Corporate debt securities		—		87,972		—		87,972
Total marketable securities	$	30,932	$	93,848	$	—	$	124,780
Total assets	$	61,598	$	93,848	$	—	$	155,446
Liability
Participation right liability	$	—	$	—	$	3,105	$	3,105
Total liabilities	$	—	$	—	$	3,105	$	3,105

Money market funds and treasury bills are highly liquid and actively traded marketable securities that generally transact at a stable $1.00 net asset value, representing their estimated fair value. The fair value of marketable securities is based upon observable market inputs obtained from third-party pricing services. The pricing services use industry-standard valuation models and observable inputs, including reported trades, broker-dealer quotes, bids or offers on the same or similar securities issuer, credit spreads, benchmark securities, prepayment and default projections based on historical data, and other observable inputs. As of September 30, 2025, the Company’s marketable securities have maturities of less than one year and are classified as current assets.

The participation right liability was settled in full in April 2025 and is no longer outstanding as of September 30, 2025. The following table summarizes the activity of the Company’s participation right liability, which was previously measured using unobservable inputs (in thousands):


Balance as of December 31, 2024	$	3,105
Change in fair value of participation right liability		725
Balance as of March 31, 2025	$	3,830
Settlement of participation right liability		(3,830	)
Balance as of June 30, 2025	$	—

As of the settlement date, the fair value of the participation right liability approximated the intrinsic value per Series B share issued. The fair value per Series B share was estimated using the Probability-Weighted Expected Return Method (“PWERM”). Under the PWERM, we considered various liquidity events, including the de-SPAC Transaction, an initial public offering, and a sale of the Company, assigned probability to each liquidity scenario, and estimated the fair value per Series B share using the following assumptions:


Probability of a qualifying liquidity event	15.0% – 50.0%
Expected term, years		0.29 – 1.67
Discount rate		20.0%

The following tables summarize the amortized cost and fair value of the Company’s cash equivalents and marketable securities by major investment category for the periods indicated (in thousands):


	September 30, 2025
	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Marketable securities:
Treasury bills	$	7,981	$	—	$	—	$	7,981
Commercial paper		18,585		5		—		18,590
Corporate debt securities		32,942		31		—		32,973
Total marketable securities	$	59,508	$	36	$	—	$	59,544


	December 31, 2024
	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Marketable securities:
Treasury bills	$	30,825	$	107	$	—	$	30,932
Commercial paper		5,857		19		—		5,876
Corporate debt securities		87,750		222		—		87,972
Total marketable securities	$	124,432	$	348	$	—	$	124,780

There were no unrealized gains or losses on cash equivalents as of September 30, 2025, and December 31, 2024. There were no securities in an unrealized loss position as of September 30, 2025 and December 31, 2024. No allowance for credit losses for the Company’s marketable securities was recorded as of September 30, 2025 and December 31, 2024.

- 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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-Topic 820
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+ Details

BridgeBio Oncology Therapeutics, Inc. 10-Q