RAPID MICRO BIOSYSTEMS, INC.RPID

RAPID MICRO BIOSYSTEMS, INC. Fair Value Disclosure

10-KFiled Feb 28, 20252 min read
Fair value of financial assets and liabilities
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):
Fair value measurements as of December 31, 2024
Level 1Level 2Level 3Total
Assets
Cash equivalents$13,721 $— $— $13,721 
Short-term investments33,821 — — 33,821 
$47,542 $— $— $47,542 
Fair value measurements at December 31, 2023
Level 1Level 2Level 3Total
Assets
Cash equivalents$20,306 $— $— $20,306 
Short-term investments62,625 5,143 — 67,768 
Long term investments2,911 — — 2,911 
$85,842 $5,143 $— $90,985 
During the years ended December 31, 2024 and 2023, respectively, there were no transfers between Level 1, Level 2 and Level 3.
Cash equivalents
Cash equivalents consist of money market funds and treasury bills, and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The Company considers all highly liquid interest-earning investments with a maturity of 90 days or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values.
Valuation of short-term and long-term investments
U.S. Treasury bills and notes included in short-term and long-term investments were valued by the Company using quoted prices in active markets for identical securities, which represents a Level 1 measurement within the fair value hierarchy. The Company's certificates of deposit included in short-term investments were valued using quoted prices for similar assets in active markets (or identical assets in inactive markets), which represent a Level 2 measurement within the fair value hierarchy. There were no transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy during the years ended December 31, 2024 and 2023.
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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 TaxesEarnings Per SharePP&ELeasesCommitmentsStock CompensationNew Standards