DELCATH SYSTEMS, INC.DCTH

DELCATH SYSTEMS, INC. Fair Value Disclosure

10-KFiled Feb 26, 20263 min read
Fair Value Measurements
The Company’s fair value measurements are classified and disclosed in one of the following three categories:
•Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
•Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;
•Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
The table below presents activity within Level 3 of the fair value hierarchy and the Company’s liabilities carried at fair value for the year ended December 31, 2025:
Level 3
(In thousands)Contingent Liabilities
Balance at January 1, 2025$974 
Change due to liability payment(208)
Liability fair value adjustment(4)
Total change in foreign exchange102 
Balance at December 31, 2025$864 
Contingent liabilities are re-measured to fair value each reporting period using projected financial targets, discount rates, probabilities of payment, and projected payment dates.
Significant unobservable inputs in the valuation include:
•Probability of payment: 100%
•Discount rate: 3.75%
•Timing of expected payments: 0 - 2 years
Projected contingent payment amounts are discounted back to the current period using a discounted cash flow model. Projected financial targets are based on the Company’s most recent internal operational budgets and may take into consideration alternate scenarios that could result in more or less profitability for the respective service line. Increases or decreases in projected financial targets and probabilities of payment may result in significant
changes in the fair value measurements. Increases in discount rates and the time to payment may result in lower fair value measurements. Increases or decreases in any of those inputs in isolation may result in immaterially lower or higher fair value measurement.
The following tables present information about the Company’s financial assets and liabilities that have been measured at fair value as of December 31, 2025 and December 31, 2024 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value.
December 31, 2025
(In thousands)Quoted Prices in
Active Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)		Total
Assets:
   Money market funds$2 $— $— $2 
   U.S. government agency bonds47,582 — 47,582 
Total Assets$2.00 $47,582 $— $47,584 
Liabilities:
Contingent Liability$— $— $864 $864 
Total Liabilities$— $— $864 $864 
December 31, 2024
(In thousands)Quoted Prices in
Active Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)		Total
Assets:
   Money market funds$9 $— $— $9 
   U.S. government agency bonds— 20,821 — 20,821 
Total Assets$9 $20,821 $— $20,830 
Liabilities:
Contingent Liability$— $— $974 $974 
Total Liabilities$— $— $974 $974 

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Mar 6, 2025
2023Mar 26, 2024
2022Mar 27, 2023
2021Mar 31, 2022
2020Mar 31, 2021
2019Mar 25, 2020
2017Mar 16, 2018
2016Mar 29, 2017
2015Mar 18, 2016

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

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