Vericel CorpVCEL

Vericel Corp 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).
 
Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The commercial paper, corporate notes, U.S. government securities, and U.S. government agency bonds are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. The deferred compensation plan liabilities are recorded at the value of the amount owed to the plan participants, with changes in value recognized as compensation expense. The calculation of the deferred compensation plan obligation is derived from observable market data by reference to hypothetical investments selected by the participants. There were no transfers into or out of Level 3 from December 31, 2023 to December 31, 2025.

The following table summarizes the valuation of the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:

 December 31, 2025December 31, 2024
  Fair value measurement category Fair value measurement category
(In thousands)TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
Assets:
   Money market funds $38,110 $38,110 $— $— $43,307 $43,307 $— $— 
Commercial paper (a)
7,111 — 7,111 — 1,953 — 1,953 — 
Corporate notes83,034 — 83,034 — 71,763 — 71,763 — 
U.S. government agency bonds10,651 — 10,651 — 7,857 — 7,857 — 
   U.S. government securities (a)
47,766 — 47,766 — 16,150 — 16,150 — 
Total assets$186,672 $38,110 $148,562 $— $141,030 $43,307 $97,723 $— 
Liabilities:
Deferred compensation plan liabilities$1,422 $— $1,422 $— $306 $— $306 $— 
Total liabilities$1,422 $— $1,422 $— $306 $— $306 $— 

(a) Approximately $47.8 million of U.S. government securities and $2.0 million of commercial paper had an original maturity of 90 days or less and were recorded as a cash equivalent as of December 31, 2025. Approximately $16.2 million of U.S. government securities had an original maturity of 90 days or less and were recorded as a cash equivalent as of December 31, 2024.

The fair values of the cash equivalents and marketable securities are based on observable market prices. The Company’s accounts receivables, accounts payable and accrued expenses are valued at cost which approximates fair value.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 27, 2025
2023Feb 29, 2024
2022Feb 23, 2023
2021Feb 24, 2022
2020Feb 24, 2021
2019Feb 25, 2020
2018Feb 26, 2019
2017Mar 5, 2018
2016Mar 13, 2017

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 TaxesRevenueEarnings Per SharePP&ELeasesSegmentsDebtCommitmentsStock CompensationNew Standards