Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 6 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 March 31, 2020 and December 31, 2019, 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
	March 31, 2020								March 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents:
Cash	$	18,460	$	—	$	—	$	18,460	$	18,460
Money market funds	586		—		—		586		586
Total cash and cash equivalents	19,046		—		—		19,046		19,046
Restricted cash equivalents	3,500		1,874		—		5,374		5,374
Total assets	$	22,546	$	1,874	$	—	$	24,420	$	24,420
Liabilities:
Accrued royalties, fulfillment and other current liabilities
Napster acquisition contingent consideration	$	—	$	—	$	5,396	$	5,396	N/A
Other long-term liabilities
Napster acquisition contingent consideration	—		—		6,904		6,904		N/A
Total liabilities	$	—	$	—	$	12,300	$	12,300	N/A

	Fair Value Measurements as of								Amortized Cost as of
	December 31, 2019								December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
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
Liabilities:
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

Restricted cash equivalents as of March 31, 2020 and December 31, 2019 relate to cash pledged as collateral against letters of credit in connection with lease agreements and our Loan and Security Agreement ("Loan Agreement") requires us to maintain a minimum balance of $3.5 million unrestricted cash at the bank. See Note 8 Notes Payable and Long-term debt for additional details.

Accrued royalties, fulfillment and other current liabilities and Other long-term liabilities as of March 31, 2020 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 5 Acquisitions, this liability is adjusted quarterly to fair value through earnings. During the quarter ended March 31, 2020, we recorded the change in fair value of the contingent consideration of $0.3 million, as a decrease to the total liability on the consolidated balance sheet and as a reduction of 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). During the three months ended March 31, 2020 and 2019, we did not record any impairments on those assets required to be measured at fair value on a non-recurring basis.