FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2025

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The interest rate swap agreement we entered into in connection with our Term Note, as disclosed in “Note (2) Summary of Significant Accounting Policies; (l) Interest Rate Swap Agreement” and “Note (10) Debt,” is measured at fair value on a recurring basis using Level 2 inputs. The contingent consideration liability on our balance sheet is measured at fair value on a recurring basis using Level 3 inputs.

Our contingent consideration liability is a result of our acquisition of Acculogic on December 21, 2021, and represents the estimated fair value of the additional cash consideration payable that is contingent upon sales to Electric Vehicle (“EV”) or battery customers. We may pay the seller up to an additional CAD $5.0 million in the five-year period from 2022 through 2026. The additional payments will be based on a percent of net invoices for which payments have been received on systems sold to EV or battery customers in excess of CAD $2.5 million per year in each of the five years. The maximum payment is capped at CAD $5.0 million, which equates to approximately $3.5 million at March 31, 2025. There were no payments due to the seller for the years ended December 31, 2023 or 2024. To estimate the fair value of the contingent consideration at the acquisition date, an option-based income approach using a Monte Carlo simulation model was utilized due to the non-linear payout structure. As of the acquisition date, this resulted in an estimated fair value of $1.4 million. This amount was recorded as a contingent consideration liability and included in the purchase price as of the acquisition date. We reassess the estimated fair value of this liability annually using this same approach, or more frequently, if we determine that there have been material changes to the assumptions used in the calculation of the probable payout. Changes in the amount of the estimated fair value of the earn-outs since the acquisition date are recorded as operating expenses in our consolidated statement of operations in the quarter in which they occur. The current portion of our contingent consideration liability is included as a component of accrued expenses and other current liabilities, while the non-current portion is included in Other Liabilities on our consolidated balance sheets.

The following fair value hierarchy table presents information about assets and (liabilities) measured at fair value on a recurring basis:

	March 31, 2025
			Fair Value Measurement Using
(in thousands)	Total		Level 1		Level 2		Level 3
Contingent consideration - current	$	(407)	$	-	$	-	$	(407)
Contingent consideration - long term	(417)		-		-		(417)
Interest rate swap	$	82	$	-	$	82	$	-

	December 31, 2024
			Fair Value Measurement Using
(in thousands)	Total		Level 1		Level 2		Level 3
Contingent consideration - current	$	(62)	$	-	$	-	$	(62)
Contingent consideration - long term	(825)		-		-		(825)
Interest rate swap	$	117	$	-	$	117	$	-

Changes in the fair value of our Level 3 contingent consideration liabilities for the three months ended March 31, 2025 and 2024, were as follows:

	Three Months Ended March 31,
(in thousands)	2025		2024
Balance at beginning of period	$	887	$	1,093
Cash payments	(34)		-
Change in estimated fair value	(28)		-
Impact of foreign currency translation adjustments	(1)		(24)
Balance at end of period	$	824	$	1,069