Monster Beverage Corporation: 10-K Risk Factor Changes

4. ASC 820, “Fair Value Measurement”, provides a framework for measuring fair value and requires disclosures regarding fair value measurements. ASC 820 defines fair value as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The three levels of inputs required by the standard that the Company uses to measure fair value are summarized below. ASC 820 requires the use of observable market inputs (quoted market prices) when measuring fair value and requires a Level 1 quoted price to be used to measure fair value whenever possible. The following tables present the fair value of the Company’s financial assets and liabilities that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy at: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total Cash ​ $ 1,244,954 ​ $ — ​ $ — ​ $ 1,244,954 Money market funds ​ 787,293 ​ — ​ — ​ 787,293 Commercial paper ​ ​ — ​ ​ 90,419 ​ ​ — ​ ​ 90,419 Certificates of deposit ​ ​ — ​ ​ 68,597 ​ ​ — ​ ​ 68,597 Municipal securities ​ ​ — ​ ​ 1,882 ​ ​ — ​ ​ 1,882 U.S. treasuries ​ ​ — ​ ​ 749,465 ​ ​ — ​ ​ 749,465 Corporate bonds ​ ​ — ​ ​ 309,919 ​ ​ — ​ ​ 309,919 Foreign currency derivatives ​ — ​ (1,474) ​ — ​ (1,474) Commodity derivatives ​ ​ — ​ ​ 35,188 ​ ​ — ​ ​ 35,188 Total ​ $ 2,032,247 ​ $ 1,253,996 ​ $ — ​ $ 3,286,243 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts included in: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 2,032,247 ​ $ 55,870 ​ $ — ​ $ 2,088,117 Short-term investments ​ ​ — ​ ​ 677,084 ​ ​ — ​ ​ 677,084 Accounts receivable, net ​ — ​ 33,667 ​ — ​ 33,667 Other assets ​ ​ — ​ ​ 3,530 ​ ​ — ​ ​ 3,530 Investments ​ ​ — ​ ​ 487,329 ​ ​ — ​ ​ 487,329 Accrued liabilities ​ — ​ (3,484) ​ — ​ (3,484) Total ​ $ 2,032,247 ​ $ 1,253,996 ​ $ — ​ $ 3,286,243 ​ 87 87 Table of ContentsMONSTER BEVERAGE CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Tabular Dollars in Thousands, Except Per Share Amounts)​​​​​​​​​​​​​​December 31, 2024 ​ ​ ​Level 1 ​ ​ ​Level 2 ​ ​ ​Level 3 ​ ​ ​TotalCash​$ 1,103,647​$ —​$ —​$ 1,103,647Money market funds​ 396,306​ —​ —​ 396,306Certificates of deposit​​ —​​ 33,334​​ —​​ 33,334Foreign currency derivatives​ —​ 799​ —​ 799Commodity derivatives​​ —​​ (785)​​ —​​ (785)Total​$ 1,499,953​$ 33,348​$ —​$ 1,533,301​​​​​​​​​​​​​Amounts included in:​​​​​​​​​​​​Cash and cash equivalents​$ 1,499,953​$ 33,334​$ —​$ 1,533,287Accounts receivable, net​ —​ 5,991​ —​ 5,991Other assets​​ —​​ 6​​ —​​ 6Accrued liabilities​ —​ (5,952)​ —​ (5,952)Other liabilities​​ —​​ (31)​​ —​​ (31)Total​$ 1,499,953​$ 33,348​$ —​$ 1,533,301​The Company’s valuation of its Level 1 investments is based on quoted market prices in active markets for identical securities. The Company’s valuation of its Level 2 investments is based on other observable inputs, specifically a market approach which utilizes valuation models, pricing systems, mathematical tools and other relevant information for the same or similar securities. The Company’s valuation of its Level 2 foreign currency exchange contracts is based on quoted market prices of the same or similar instruments, adjusted for counterparty risk. There were no transfers between Level 1 and Level 2 measurements during the years ended December 31, 2025 and 2024, and there were no changes in the Company’s valuation techniques. Assets recognized or disclosed at fair value in the consolidated financial statements on a nonrecurring basis may include items such as property and equipment, goodwill and other intangible assets. These assets are measured at fair value whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Nonrecurring fair value measurements were not material for the year ended December 31, 2025.​5.INVENTORIESInventories consist of the following at December 31:​​​​​​​​​ ​ ​ ​2025 ​ ​ ​2024Raw materials​$ 322,604​$ 232,698Work in process​​ 1,114​​ 1,200Finished goods​ 475,905​ 503,209​​$ 799,623​$ 737,107​​88 Table of ContentsMONSTER BEVERAGE CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Tabular Dollars in Thousands, Except Per Share Amounts)​ Table of Contents Table of Contents