Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting standards describe a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

•Level 1 — Quoted prices in active markets for identical assets, liabilities, or funds.

•Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses and other current liabilities approximate fair value because of the short maturity of these items.

For the three months ended March 31, 2022, the Company recognized a gain of $1.7 million from changes in fair value of a derivative asset recognized from the sale of our equity method investment in Accu-Trade.

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2023 and December 31, 2022 by level within the fair value hierarchy. These assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands):


	At March 31, 2023								At December 31, 2022
							Total Fair								Total Fair
	Level 1		Level 2		Level 3		Value		Level 1		Level 2		Level 3		Value
Assets:
Cash equivalents	$	140,224	$	—	$	—	$	140,224	$	57,518	$	—	$	—	$	57,518
Total assets	$	140,224	$	—	$	—	$	140,224	$	57,518	$	—	$	—	$	57,518


	At March 31, 2023								At December 31, 2022
							Total Fair								Total Fair
	Level 1		Level 2		Level 3		Value		Level 1		Level 2		Level 3		Value
Liabilities:
Contingent consideration, current	$	—	$	—	$	1,849	$	1,849	$	—	$	—	$	1,983	$	1,983
Contingent consideration, non-current	—		—		3,403		3,403		—		—		4,678		4,678
Total liabilities	$	—	$	—	$	5,252	$	5,252	$	—	$	—	$	6,661	$	6,661

The following table summarizes the changes in the fair value of the contingent consideration obligation (in thousands):


	Three Months Ended March 31, 2023

Fair value, beginning of period	$	6,661
Cash payments	(2,000)
Changes in fair value	591
Fair value, end of period	$	5,252

The following table summarizes the significant unobservable inputs and valuation technique in the fair value measurement of the contingent consideration liability at March 31, 2023:


Valuation Technique	Unobservable Inputs	Value Range
Scenario-Based model	Probabilities of achievement	100.0%