Personalis Inc

Note 5. Fair Value Measurements

The following tables show the Company’s financial assets measured at fair value on a recurring basis and the level of inputs used in such measurements as of September 30, 2024 and December 31, 2023 (in thousands):

Marketable debt securities at September 30, 2024 have maturities due in less than 12 months. No security has been in a continuous unrealized loss position for more than 12 months and the Company does not consider any of its marketable debt securities to be impaired.

Tempus Warrants

The Black-Scholes option-pricing model was used to estimate fair value of the warrants issued to Tempus AI, Inc. ("Tempus") at the date of issuance, November 28, 2023, and at each subsequent balance sheet date prior to their exercise in full. Assumptions used are listed below, which are Level 3 fair value inputs. Expected term was equal to the then-remaining contractual periods of each of the two warrants. Expected volatility was based on the Company's actual historical volatility over the expected terms of the warrants. The risk-free interest rate was based on the U.S. Treasury yield curve over the expected terms of the warrants.

In August 2024, Tempus exercised its warrants in full. Fair value was determined at settlement as the fair value of shares delivered (9,218,800 shares of common stock at $5.07 per share) less exercise price ($2.00 average exercise price per share). Refer to Note 8 for further information about the warrants issued to Tempus.

The following table sets forth a summary of the changes in fair value of the Tempus Warrants, which are classified as Level 3 financial instruments (in thousands):

Note 6.