biote Corp. Fair Value Disclosure
The following table presents information regarding the Company’s financial liabilities that were measured at fair value on a recurring basis:
|
|
December 31, 2025 |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnout liability |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,112 |
|
|
$ |
4,112 |
|
|
|
December 31, 2024 |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnout liability |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
17,235 |
|
|
$ |
17,235 |
|
There were no movements between levels during the years ended December 31, 2025 and 2024.
Level 3 Disclosures
Earnout Liability
The earnout liability related to the Business Combination Agreement was valued using a Monte Carlo simulation in order to project the future path of the Company’s stock price over the earnout period. The earnout liability related to the acquisition of Simpatra was valued using a Monte Carlo simulation in order to project the future path of Simpatra’s revenue and the Company’s stock price over the earnout period. The carrying amount of these liabilities may fluctuate significantly, and actual amounts paid may be materially different from the liability’s estimated fair value.
The following table provides the significant inputs used to measure the fair value of the level 3 earnout liability related to the Business Combination Agreement:
|
|
As of |
|
|||||
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Stock price |
|
$ |
2.60 |
|
|
$ |
6.18 |
|
Risk-free rate |
|
|
3.4 |
% |
|
|
4.2 |
% |
Volatility |
|
|
74.1 |
% |
|
|
75.0 |
% |
Term (in years) |
|
|
1.4 |
|
|
|
2.4 |
|
The following table provides the significant inputs used to measure the fair value of the level 3 earnout liability related to the acquisition of Simpatra:
|
|
As of |
|
|||||
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Stock price |
|
$ |
2.60 |
|
|
$ |
6.18 |
|
Risk-free rate |
|
|
3.5 |
% |
|
|
4.3 |
% |
Equity volatility |
|
|
64.5 |
% |
|
|
68.5 |
% |
Revenue volatility |
|
|
57.0 |
% |
|
|
53.9 |
% |
Revenue discount rate |
|
|
14.5 |
% |
|
|
14.6 |
% |
Correlation factor |
|
|
3.0 |
% |
|
|
5.0 |
% |
Term (in years) |
|
|
2.0 |
|
|
|
3.0 |
|
Changes in fair value of the Company’s Level 3 financial instruments were as follows:
(in thousands) |
|
Earnout Liability |
|
|
Fair value as of December 31, 2024 |
|
$ |
17,235 |
|
Settlement |
|
|
(75 |
) |
Gain on asset acquisition |
|
|
(25 |
) |
Gain from change in fair value |
|
|
(13,023 |
) |
Fair value as of December 31, 2025 |
|
$ |
4,112 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 29, 2023 | |
| 2021 | Apr 7, 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.