908 Devices Inc. Fair Value Disclosure
4. Fair Value Measurements
The following tables present the Company’s fair value hierarchy for its assets and liabilities that are measured at fair value on a recurring basis (in thousands):
Fair Value Measurements at December 31, 2025 Using: | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: |
| |
| |
| |
| | ||||
Cash equivalents - Money market funds | $ | 30,040 | $ | — | $ | — | $ | 30,040 | ||||
Marketable securities - U.S. Treasury securities due in 3 - 12 months | — | 42,453 | — | 42,453 | ||||||||
Total assets measured at fair value |
| $ | 30,040 |
| $ | 42,453 |
| $ | — |
| $ | 72,493 |
Other current liabilities: | ||||||||||||
Acquisition-related contingent consideration | — | — | 16,025 | 16,025 | ||||||||
Total liabilities measured at fair value | $ | — | $ | — | $ | 16,025 | $ | 16,025 | ||||
Fair Value Measurements at December 31, 2024 Using: | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: |
| |
| |
| |
| | ||||
Cash equivalents - Money market funds | $ | 20,857 | $ | — | $ | — | $ | 20,857 | ||||
Marketable securities - U.S. Treasury securities due in 3 - 12 months | — | 25,568 | — | 25,568 | ||||||||
Total assets measured at fair value |
| $ | 20,857 |
| $ | 25,568 |
| $ | — |
| $ | 46,425 |
Other long-term liabilities: | ||||||||||||
Acquisition-related contingent consideration | — | — | 2,284 | 2,284 | ||||||||
Total liabilities measured at fair value | $ | — | $ | — | $ | 2,284 | $ | 2,284 | ||||
Money Market Funds
Money market funds were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. There were no transfers between Level 1, Level 2 or Level 3 during the years ended December 31, 2025 or 2024.
Marketable Securities
U.S. treasury securities were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.
Contingent Consideration
The Company recognizes acquisition-related contingent consideration which represents the estimated fair value of future payments or issuance of the Company’s common stock to the former owners of an acquired entity as part of certain transactions. Acquisition-related contingent consideration is measured and reported at fair value using the Monte Carlo simulation method or probability weighted scenario based on the unobservable inputs, which are significant to the fair value and classified with Level 3 of the fair value hierarchy.
For the acquisition of RedWave in April 2024, the amount of contingent consideration to be issued is contingent based on the amount of revenue the Company generates from the sale of certain RedWave products and services during the -year period from May 1, 2024 through April 30, 2026. As of the acquisition date of RedWave, the fair value of the contingent consideration was estimated using a Monte Carlo simulation, utilizing the closing price of the Company’s common stock on the Nasdaq Global Market of $5.76 per share, revenue projections, an equity volatility rate of the Company of 90%, a revenue volatility rate of 30% and a discount rate of 26.5%.
As of December 31, 2025, the fair value of the contingent consideration was estimated utilizing the closing price of the Company’s common stock on the Nasdaq Global Market of $5.25 per share, revenue projections, an equity volatility rate of the Company of 75%, a revenue volatility rate of 24.0% and a discount rate of 25.2%. The fair value of contingent consideration increased by $13.7 million during the year ended December 31, 2025, primarily due to the change in the Company’s stock price and the revenue projections, which include the recent launch of VipIR. The following table provides a roll-forward of the fair value of the Company’s contingent consideration, for which fair value is determined using Level 3 inputs (in thousands):
Balance as of December 31, 2023 | $ | 500 | |
Acquisition date fair value of contingent consideration - RedWave acquisition | 15,500 | ||
Decrease in fair value of contingent consideration earnouts | (13,216) | ||
Contingent consideration payment | (500) | ||
Balance as of December 31, 2024 | $ | 2,284 | |
Increase in fair value of contingent consideration earnouts | 13,741 | ||
729 | |||
Contingent consideration payment - KAF | (729) | ||
Balance as of December 31, 2025 | $ | 16,025 |
The change in the fair value of contingent consideration liability is included in loss from operations.
Please refer to Note 19, Acquisition, for further detail on RedWave acquisition. Changes in the fair value of contingent consideration resulting from a change in the underlying inputs are recognized in our consolidated statements of operations until the arrangement is settled.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 9, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 8, 2024 | |
| 2022 | Mar 15, 2023 | |
| 2021 | Mar 11, 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.