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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2023

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, customer deposits and sales return liability are reasonable estimates of their fair value because of the short maturity of these items. The fair value of the contingent consideration and the convertible feature related to the convertible note are discussed in Note 5. As discussed in Note 5, the fair value of the convertible notes conversion features has been reclassified to equity in the current year and the conversion features no longer requires measurement at fair value. The convertible notes are carried at amortized cost on the condensed consolidated balance sheet.

The fair value of the long-term debt is based on the amount of future cash flows associated with the instrument discounted using the Company’s market rate. As of June 30, 2023 and December 31, 2022, the carrying value and fair value of the convertible note were as follows (in thousands):


	June 30,		December 31,
	2023		2022
Carrying value
Convertible Note	$	41,635	$	40,423
2022 Note	$	16,162	$	15,396

Fair value
Convertible Note	$	35,574	$	33,794
2022 Note	$	18,250	$	16,495