GeneDx Holdings Corp.WGS
GeneDx Holdings Corp. Fair Value Disclosure
Fair Value Measurements
Financial assets and liabilities are recorded at fair value on the consolidated balance sheets on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For further information regarding the Company’s fair value measurements, see Note 2, “Summary of Significant Accounting Policies”.
The following tables set forth the fair value of financial instruments that were measured at fair value on a recurring basis:
| December 31, 2025 | |||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||
| Money market funds | $ | 85,381 | $ | 85,381 | $ | — | $ | — | |||||||||||||||
| U.S. treasury bonds | 32,079 | — | 32,079 | — | |||||||||||||||||||
| Corporate and municipal bonds | 33,854 | — | 33,854 | — | |||||||||||||||||||
| Total financial assets | $ | 151,314 | $ | 85,381 | $ | 65,933 | $ | — | |||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||
| Public warrant liability | $ | 755 | $ | 755 | $ | — | $ | — | |||||||||||||||
| Private warrant liability | 345 | — | 345 | — | |||||||||||||||||||
| Contingent consideration | 1,570 | — | — | 1,570 | |||||||||||||||||||
| Total financial liabilities | $ | 2,670 | $ | 755 | $ | 345 | $ | 1,570 | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||
| Money market funds | $ | 57,907 | $ | 57,907 | $ | — | $ | — | |||||||||||||||
| U.S. treasury bonds | 30,990 | — | 30,990 | — | |||||||||||||||||||
| Corporate and municipal bonds | 25,679 | — | 25,679 | — | |||||||||||||||||||
| Total financial assets | $ | 114,576 | $ | 57,907 | $ | 56,669 | $ | — | |||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||
| Public warrant liability | $ | 2,415 | $ | 2,415 | $ | — | $ | — | |||||||||||||||
| Private warrant liability | 1,104 | — | 1,104 | — | |||||||||||||||||||
| Total financial liabilities | $ | 3,519 | $ | 2,415 | $ | 1,104 | $ | — | |||||||||||||||
There were no transfers between Level 1, Level 2 and Level 3 during the years ended December 31, 2025 or 2024.
The Company’s financial assets include investments in money market funds, U.S. treasury bonds, and corporate and municipal bonds. Investments in money market funds are classified within Level 1 of the fair value hierarchy as they are based on quoted prices in active markets. Investments in U.S. treasury bonds and corporate and municipal bonds are classified within Level 2 of the fair value hierarchy as they are based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes in active markets.
The Company’s marketable securities presented in the consolidated balance sheet at December 31, 2025 have maturity dates ranging from 2026 through 2028 and are classified as current assets as these investments are intended to be readily available to fund current operations. The differences between the fair value and amortized cost basis of each security are the unrealized gains or losses recorded in accumulated other comprehensive income. As of December 31, 2025, the amortized cost for maturities less than one year and greater than one year were $32.1 million and $32.8 million, respectively.
Public and Private Warrants
As of the consummation of the CMLS and Legacy Sema4 Business Combination in July 2021, there were 666,516 warrants to purchase shares of Class A common stock outstanding, including 447,223 public warrants and 219,293 private placement warrants. As of December 31, 2025, there were 666,515 warrants to purchase shares of Class A common stock outstanding, including 457,323 public warrants and 209,192 private placement warrants outstanding. Each warrant expires five years after the Business Combination or earlier upon redemption or liquidation, and entitles the holder to purchase one share of Class A common stock at an exercise price of $379.50 per share, subject to adjustment, at any time commencing on September 4, 2021.
The Company may redeem the outstanding public warrants if the price per share of the Class A common stock equals or exceeds $594.00 as described below:
•in whole and not in part;
•at a price of $0.33 per public warrant;
•upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
•if, and only if, the closing price of the Class A common stock equals or exceeds $594.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three trading days before sending the notice of redemption to warrant holders.
The Company may redeem the outstanding warrants if the price per share of the Class A common stock equals or exceeds $330.00 as described below:
•in whole and not in part;
•at $3.30 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the common stock;
•if, and only if, the closing price of the Class A common stock equals or exceeds $330.00 per share (as adjusted) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and
•if the closing price of the common stock for any 20 trading days within a 30-trading day period ending three trading days before the Company sends notice of redemption to the warrant holders is less than $594.00 per share (as adjusted), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
The private placement warrants were issued to CMLS Holdings, LLC, Mr. Munib Islam, Dr. Emily Leproust and Mr. Nat Turner, and are identical to the public warrants underlying the units sold in the initial public offering, except that (1) the private placement warrants and the common stock issuable upon the exercise of the private placement warrants would not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (2) the private placement warrants are exercisable on a cashless basis, (3) the private placement warrants are non-redeemable (except as described above, upon a redemption of warrants when the price per share of Class A common stock equals or exceeds $330.00) so long as they are held by the initial purchasers or their permitted transferees, and (4) the holders of the private placement warrants and the common stock issuable upon the exercise of the private placement warrants have certain registration rights. If the private placement warrants are held by someone other than the initial purchasers or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants.
The public warrants are classified within Level 1 of the fair value hierarchy as they are traded in active markets and the fair value is determined on the basis of quoted market prices. The private placement warrants are classified within Level 2 of the fair value
hierarchy as management determined the fair value of each private placement warrant is the same as that of a public warrant because the terms are substantially the same.
For the years ended December 31, 2025, 2024, and 2023, a gain of $2.4 million, loss of $3.3 million, and gain of $0.2 million was recorded within the change in the change in fair value of financial liabilities in the consolidated statements of operations and comprehensive loss, respectively.
Contingent Consideration (Fabric Genomics)
Pursuant to the Merger Agreement, the Company agreed to pay up to (i) $10.5 million in cash, shares of Class A common stock or a combination thereof, as determined by the Company in its sole discretion, on or prior to April 30, 2026 subject to Fabric Genomics achieving gross revenue equal to or above $6.0 million and a gross margin equal to or above 69% for the fiscal year ending December 31, 2025 (the “First Milestone Payment”), with the amount of the First Milestone Payment determined by multiplying $7.0 million by the quotient obtained by dividing Fabric Genomics’ gross revenue for the fiscal year ending December 31, 2025 by $8.0 million, and (ii) $7.5 million in cash, shares of Class A common stock or a combination thereof, as determined by the Company in its sole discretion, on or prior to April 30, 2027 subject to Fabric Genomics achieving gross revenue equal to or above $9.0 million and a gross margin equal to or above 69% for the fiscal year ending December 31, 2026 (the “Second Milestone Payment” and, together with the First Milestone Payment, the “Milestone Payments”), with the amount of the Second Milestone Payment determined by multiplying $5.0 million by the quotient obtained by dividing Fabric Genomics’ gross revenue for the fiscal year ending December 31, 2026 by $12.0 million. The shares of Class A common stock issued, if any, pursuant to the Milestone Payments are referred to as the “Milestone Shares.” Any Milestone Shares that are issued will be valued at $93.0318 per share based on the average of the daily volume average weighted price of the Class A common stock over the period of 30 trading days ended April 11, 2025.
The measurement period for the First Milestone Payment was completed as of December 31, 2025, and the Company determined the payment amount based on the gross revenue and gross margin achieved by Fabric Genomics for the year ended December 31, 2025.
The fair value of the Second Milestone Payment was determined based on a Monte Carlo simulation valuation model, and is categorized as Level 3 of the fair value hierarchy as the Company utilizes unobservable inputs in estimating the fair value. Estimates and assumptions utilized in the Monte Carlo simulation model include risk-adjusted forecasted revenue and gross margin, revenue and gross profit volatility rates, expected stock price volatility, and discount rates which are based on the cost of debt and equity.
The following table summarizes the Level 3 inputs used in the valuation of the contingent consideration:
| At December 31, 2025 | At May 5, 2025 | ||||||||||||||||
| Range | Weighted-average | ||||||||||||||||
| Discount rate | 3.5% | 3.8% - 4.0% | 3.9% | ||||||||||||||
| Expected term (in years) | 1.3 | 1.0 - 2.0 | 1.4 | ||||||||||||||
| Equity volatility | 85.0% | 107.0% | 107.0% | ||||||||||||||
| Revenue volatility | 12.5% | 10.0% | 10.0% | ||||||||||||||
| Gross margin volatility | 30.0% | 20.0% | 20.0% | ||||||||||||||
At December 31, 2025, the amount of contingent consideration liability reported in the consolidated balance sheet was $7.0 million, which consisted of $5.4 million for the First Milestone Payment and $1.6 million for the fair value of the Second Milestone Payment. During the year ended December 31, 2025, a loss of $3.6 million was recorded within the change in fair value of financial liabilities in the consolidated statements of operations and comprehensive loss.
Connecticut Department of Economic and Community Development Funding Commitment
The Company’s loan from the Connecticut Department of Economic and Community Development (“DECD”) is classified within Level 2 of the fair value hierarchy. The loan was recorded at its carrying value of $4.5 million and $5.8 million, respectively, at December 31, 2025 and December 31, 2024, with $4.5 million recorded in other current liabilities on the consolidated balance sheet at December 31, 2025. The fair value was $4.3 million, which is estimated based on discounted cash flows using the yields of similar debt instruments of other companies with similar credit profiles. See Note 9, “Long-Term Debt” for further information.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 30, 2021 | |
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.