Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 5. Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of December 31, 2019 and 2018, and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands).

	Fair Value Measurements as of								Amortized Cost as of
	December 31, 2019								December 31, 2019
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents:
Cash	$	14,887	$	—	$	—	$	14,887	$	14,887
Money market funds	1,918		—		—		1,918		1,918
Total cash and cash equivalents	16,805		—		—		16,805		16,805
Restricted cash equivalents	3,500		1,874		—		5,374		5,374
Total assets	$	20,305	$	1,874	$	—	$	22,179	$	22,179
Accrued royalties, fulfillment and other current liabilities
Napster acquisition contingent consideration	$	—	$	—	$	2,800	$	2,800	N/A
Other long-term liabilities
Napster acquisition contingent consideration	—		—		9,800		9,800		N/A
Total liabilities	$	—	$	—	$	12,600	$	12,600	N/A

	Fair Value Measurements as of								Amortized Cost as of
	December 31, 2018								December 31, 2018
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents:
Cash	$	22,853	$	—	$	—	$	22,853	$	22,853
Money market funds	12,708		—		—		12,708		12,708
Total cash and cash equivalents	35,561		—		—		35,561		35,561
Short-term investments:
Corporate notes and bonds	—		24		—		24		24
Total short-term investments	—		24		—		24		24
Restricted cash equivalents	—		1,630		—		1,630		1,630
Warrant issued by Napster (included in Other assets)	—		—		865		865		—
Total assets	$	35,561	$	1,654	$	865	$	38,080	$	37,215

Restricted cash equivalents as of December 31, 2019 and 2018 relate to cash pledged as collateral against letters of credit in connection with lease agreements and, as of December 31, 2019, our Loan Agreement requires us to maintain a minimum balance of $3.5 million unrestricted cash at the bank. See Note 10. Notes Payable and Long-term Debt for additional details.

Accrued royalties, fulfillment and other current liabilities and Other long-term liabilities as of December 31, 2019 include the estimated fair value of the contingent consideration for the Napster acquisition, which was determined using a fair value measurement categorized within Level 3 of the fair value hierarchy. As discussed in Note 4. Acquisitions, this liability is adjusted quarterly to fair value through earnings. During the fiscal year ended December 31, 2019, we recorded the change in fair value of the contingent consideration of $1.0 million as an increase to the total liability on the consolidated balance sheet and as general and administrative expense on the consolidated statement of operations.

Items Measured at Fair Value on a Non-recurring Basis

Certain of our assets and liabilities are measured at estimated fair value on a non-recurring basis, using Level 3 inputs. These instruments are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). We did not record any impairments on those assets required to be measured at fair value on a non-recurring basis in 2019 or 2018.

See Note 12. Lease Exit and Related Charges, for a discussion of the losses related to reductions in the use of RealNetworks' office space, which were recorded at the estimated fair value of remaining lease obligations, less expected sub-lease income.