Fair Value Measurements |
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| Fair Value Measurements |
6. Fair Value Measurements
Fair Value of Crystalys
Urica valued its equity holding in Crystalys using an option pricing model backsolve method (level 3 in the fair value hierarchy) to reassess the fair value of its investment in Crystalys after Crystalys announced a Series A financing and recognize additional shares received to maintain its 15% ownership percentage under the APA, resulting in an estimated fair value of $15.1 million which was recorded as other income in the condensed consolidated statement of operations during the three and nine months ended September 30, 2025. The following inputs were utilized to derive the value: risk free rate of return: 3.61%; volatility: 80%; and a discount for lack of marketability: 31.6%. There are significant judgments and estimates inherent in the determination of the fair value, such as those regarding the selection of comparable companies used in estimating volatility, and the probability of possible future events. Such estimates involve inherent uncertainties and the application of significant judgment. Changes in judgements could have a material impact on our results of operation.
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).
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 September 30, 2025 and December 31, 2024. At September 30, 2025 and December 31, 2024, the liability associated with the October 2022 Warrants was approximately $2,000 and $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:
As of September 30, 2025, no transfers occurred between Level , Level , and Level 3 instruments. |
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