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Derivative Financial Instruments
6 Months Ended
Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

8. Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments in debt or equity instruments and measurement of their fair value for accounting purposes.

The Superpriority Term Loans, as defined and discussed in Note 10, Debt, include three embedded features; contingent interest upon an uncured event of default; mandatory prepayment upon certain excess cash flow; and mandatory prepayment upon an uncured event of default. Pursuant to ASC 815, these features have been identified as embedded derivative financial instruments. These embedded derivatives are required to be accounted for as derivatives and bifurcated from the debt host contract, resulting in remeasurement at each balance sheet date, with the change in fair value recognized in the Company’s condensed consolidated statement of operations. The total derivative liability related to these features as of June 30, 2023 was $1,240 and was included with accrued expenses and other current liabilities and other liabilities, net of current portion on the condensed consolidated balance sheet, as appropriate.