Fair Value Measurements

6 Months Ended

Jun. 30, 2022

4. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including short-term and long-term investments and contingent consideration. The Company’s bank and money market accounts are in bank deposits and are not quoted instruments. As such, the Company’s bank and money market accounts are all considered cash. The fair value of these financial assets and liabilities was determined based on three levels of input as follows:

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Level 1. Quoted prices in active markets for identical assets and liabilities;

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Level 2. Observable inputs other than quoted prices in active markets; and

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Level 3. Unobservable inputs.

The fair value hierarchy of the Company’s financial assets carried at fair value and measured on a recurring basis is as follows:


			Fair Value Measurements at June 30, 2022
	June 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Short-term investments (1)	$	19,907	$	—	$	19,907	$	—
Total assets	$	19,907	$	—	$	19,907	$	—
Liabilities:
Contingent consideration - current (2)	$	3,642	$	—	$	—	$	3,642
Contingent consideration - non-current (2)		—		—		—		—
Total liabilities	$	3,642	$	—	$	—	$	3,642


			Fair Value Measurements at December 31, 2021
	December 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Short-term investments (1)	$	20,076	$	15,000	$	5,076	$	—
Total assets	$	20,076	$	15,000	$	5,076	$	—
Liabilities:
Contingent consideration - current (2)	$	5,200	$	—	$	—	$	5,200
Contingent consideration - non-current (2)		2,779		—		—		2,779
Total liabilities	$	7,979	$	—	$	—	$	7,979

(1)

Short-term investments consist of money market funds (Level 1) and pooled bond funds (Level 2). Level 2 investments are priced using observable inputs, such as quoted prices in markets that are not active and yield curves.

(2)

Contingent consideration liabilities are measured using the income approach and discounted to present value based on an assessment of the probability that the Company would be required to make such future payments. The contingent consideration liabilities are measured at fair value using significant Level 3 (unobservable) inputs, such as discount rates and probability measures. Remeasurement of the contingent consideration to fair value is expensed through the income statement in the period remeasured. Contingent consideration–current is included in accrued expenses and other current liabilities and contingent considerations–non-current is included in other liabilities on the balance sheet.

The following table provides a roll-forward of the fair value of the contingent consideration categorized as Level 3 for the six months ended June 30, 2022:


	Fair Value
Year-to-Date Activity
Balance at December 31, 2021	$	7,979
Payments on contingent liabilities		(5,206	)
Amortization of discount on contingent liabilities		10
Remeasurement of contingent liabilities		859
Balance at June 30, 2022	$	3,642

Amounts included in accrued expenses and other current liabilities	$	3,642
Amounts included in other liabilities		—
Total contingent consideration	$	3,642

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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