Fair Value Measurements |
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| Fair Value Measurements |
6. Fair Value Measurements
Common Stock Warrant Liabilities
Checkpoint
Checkpoint deemed the placement agent warrants it issued in connection with a registered direct offering (the “December 2022 Placement Agent Warrants”) to be classified as liabilities on the balance sheet as they contain terms for redemption of the underlying security that are outside its control. The December 2022 Placement Agent Warrants were recorded at the time of closing at a fair value determined by using the Black-Scholes model. Checkpoint revalued the December 2022 Placement Agent Warrants at each reporting period thereafter until the closing date of the transaction with Sun Pharma, May 2025 (see Note 3). At December 31, 2024, the liability associated with the December 2022 Placement Agent Warrants was $0.2 million. At June 30, 2025 the liability associated with the December 2022 Placement Agent Warrants was nil due to the deconsolidation of Checkpoint (see Note 3).
Avenue
Avenue has previously issued freestanding warrants to purchase shares of its common stock in connection with financing activities. Avenue’s outstanding warrants to purchase common stock were originally issued in October 2022 (the “October 2022 Warrants”). The October 2022 Warrants are classified as liabilities on the balance sheet as they contain terms for redemption of the underlying security that are outside of its control. In connection with the Avenue January 2023 registered direct offering in January 2023, the down-round price protection feature was triggered and the exercise price for the October 2022 Warrants was permanently adjusted to $116.25, which was the offering price for the Avenue registered direct offering in January 2023. The Black-Scholes model was used to value the October 2022 Warrants as of June 30, 2025 and December 31, 2024. At June 30, 2025 and December 31, 2024, the liability associated with the October 2022 Warrants was de minimis and approximately $16,000, respectively.
A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Avenue warrant liability that are categorized within Level 3 of the fair value hierarchy was as follows:
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