Absci CorpABSI

Absci Corp Fair Value Disclosure

10-KFiled Mar 24, 20263 min read
Fair value measurements
The Financial Accounting Standards Board (“FASB”) has defined fair value to establish a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets.
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
When quoted market prices are available in active markets, the fair value of assets and liabilities is estimated within Level 1 of the valuation hierarchy.
If quoted prices are not available, then fair values are estimated by using pricing models, quoted prices of assets and liabilities with similar characteristics, or discounted cash flows, within Level 2 of the valuation hierarchy. In cases where Level 1 or Level 2 inputs are not available, the fair values are estimated by using inputs within Level 3 of the hierarchy.
The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024 (in thousands):
December 31, 2025
Level 1Level 2Level 3Total
Assets:
Debt Securities:
Money market funds$14,410 $— $— $14,410 
U.S. treasuries6,873 117,394 — 124,267 
Total assets$21,283 $117,394 $— $138,677 

December 31, 2024
Level 1Level 2Level 3Total
Assets
Debt Securities:
Money market funds$2,134 $— $— $2,134 
U.S. treasuries— 71,212 — 71,212 
Total assets$2,134 $71,212 $— $73,346 
Liabilities:
Contingent consideration$— $— $12,750 $12,750 
Total liabilities$— $— $12,750 $12,750 
In June 2021, the Company entered into a merger agreement with Totient, Inc. (“Totient”). Pursuant to the merger agreement, at closing, Totient shareholders received $40.0 million in cash, and 2,212,208 shares of the Company’s common stock, and became eligible to receive contingent consideration of $15.0 million in cash payable upon the achievement of specified milestones. As of December 31, 2024, the Company maintained a contingent consideration liability of $12.8 million, which was measured at fair value based on a probability-weighted approach using significant unobservable inputs (Level 3). In October 2025, the Company entered into an agreement with the selling stockholders of Totient to settle the contingent consideration liability for a payment of approximately $7.6 million and to release the remaining $8.7 million, held as restricted cash on the consolidated balance sheets, from escrow to the Company. In 2025, the Company recognized a $5.1 million gain on settlement in the consolidated statement of operations.
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Historical Timeline

Fiscal YearFiled
2025Mar 24, 2026Showing above
2024Mar 18, 2025
2023Mar 21, 2024
2022Mar 30, 2023
2021Mar 22, 2022

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsNew StandardsPay vs Performance