Company: RNAC
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001453687-25-000120
Chunk: 112

Company: Cartesian Therapeutics, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 112
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 of deductions specified in the CVR Agreement, were included in the scheduled distribution to the holders of the CVR in March 2025.The CVRs represent financial instruments that are accounted for under the fair value option election in ASC 825, Financial Instruments, or ASC 825. Under the fair value option election, the CVRs are initially measured at the aggregate estimated fair value of the CVRs and will be subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The liability was recorded at the date of approval, November 13, 2023, as a dividend. The estimated fair value of the CVR liability was determined using a Monte Carlo simulation model to estimate future cash flows associated with the legacy assets, including the expected milestone and royalty payments under the Sobi License, net of deductions. Changes in fair value of the CVR liability are presented in the consolidated statements of operations and comprehensive loss. The liability value is based on significant inputs not observable in the market such as estimated cash flows, estimated probabilities of success, and expected volatility of future revenues, which represent a Level 3 measurement within the fair value hierarchy. The significant inputs used to estimate the fair value of the CVR liability, which represented a financial instrument being accounted for under the fair value option, were as follows:September 30, 2025December 31, 2024Estimated cash flow dates2025 - 20382025 - 2038Estimated probability of success95.0% - 100.0%95.0% - 100.0%Expected volatility of future revenues22.5%22.0%The following table reflects a roll-forward of fair value for the Company’s Level 3 CVR liability for the nine months ended September 30, 2025 (in thousands):CVR liabilityFair value as of December 31, 2024$395,500 Distributions(7,754)Change in fair value(18,746)Fair value as of September 30, 2025$369,000 Forward Contract Liabilities The Company entered into a contract for the issuance of 149,330.115 shares of Series A Preferred Stock as part of the 2023 Private Placement which was settled in multiple tranches. The Company determined the obligation to issue 148,710.488 shares of Series A Preferred Stock to Dr. Timothy A. Springer, a member of the Company’s Board of Directors, and TAS Partners 

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LLC, an affiliate of Dr.