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.

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