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FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS
 9 Months Ended
Sep. 30, 2022
Investments, All Other Investments [Abstract]  
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS
 
Fair Value Measurements
 
Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. Additional information on fair value measurements is included in Note 13 to the Company’s Consolidated Financial Statements for the year ended December 31, 2021, included in Part II, Item 8 of the 2021 Form 10-K. The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer.

Investments

During September 2022, the Company invested $20 million of its cash and cash equivalents into U.S. Federal agency bonds, U.S. government bonds, U.S. treasury notes and other securities. We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values.

In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Debt investments are classified as available-for-sale and gains and losses are recorded using the specific identification method. Changes in fair value are recorded in the operating statement. Fair value is calculated based on publicly available market information.

Listed below are the cash equivalent and short-term investment balances as of September 30, 2022 (in thousands):
Fair Value LevelCost BasisGains (Losses)Recorded BasisCash EquivalentsShort-term Investments
Federal Agency BondsLevel 2$13,356 $(5)$13,351 $6,161 $7,190 
US Government bondsLevel 2494 — 494 — 494 
US Treasury notesLevel 25,447 9 5,456 1,993 3,463 
Variable NoteLevel 2703 — 703 703 — 
Cash— — — — — 
$20,000 $4 $20,004 $8,857 $11,147 

Derivatives

On May 18, 2022, the Company entered into an interest rate swap agreement for a notional value of $40.0 million. The derivative was recognized in the accompanying Unaudited Condensed Consolidated Balance Sheets at its estimated fair value as of September 30, 2022. The Company uses derivatives to manage the risk associated with changes in interest rates. The Company does not enter into derivatives for speculative purposes.

To estimate fair value for the Company's interest rate swap agreement as of September 30, 2022, the Company utilized a present value of future cash flows, leveraging a model-derived valuation that uses Level 2 observable inputs such as interest
rate yield curves. The Company estimated the fair value of the interest rate swap agreement to be $1.5 million as of September 30, 2022.

Changes in the fair value of the derivatives that qualify as cash flow hedges are recorded in Accumulated other comprehensive loss in the accompanying Unaudited Condensed Consolidated Balance Sheets until earnings are affected by the variability of the cash flows.

The Company incurred interest payments of $0.1 million and $0.2 million during the three and nine months ended September 30, 2022, which were recorded as interest expense.

The amounts recorded for the interest rate swap agreement are described below (in thousands):
Derivative InstrumentBalance Sheet Classification  September 30, 2022December 31, 2021
Interest rate swapDeposits and other$1,550 $— 
Accumulated other comprehensive loss1,220 — 
For the Three Months Ended September 30,For the Nine Months Ended September 30,
Derivative InstrumentIncome Statement Classification2022202120222021
Interest rate swapInterest expense$81 $— $224 $— 

Warrants

During the year ended December 31, 2021, the Company determined that its GP Sponsor Private Placement Warrants were subject to treatment as a liability. The GP Sponsor Private Placement Warrants could not be redeemed by the Company so long as these warrants were held by the initial purchasers or such purchasers’ permitted transferees. If these warrants were held by someone other than the initial purchasers or such purchasers’ permitted transferees, they were redeemable by the Company and exercisable on the same basis as certain warrants to purchase approximately 8.6 million shares of the Company’s Common Stock, at $11.50 per share (the “Public Warrants”). As a result, the GP Sponsor Private Placement Warrants were reclassified as a liability. On October 29, 2021, the GP Sponsor sold the warrants for $1.04 per warrant to outside holders. As a result of the sale, the new holders of the Private Placement Warrants had the same rights as that of the Public Warrant holders, which warrants expired in October 2022. Therefore as of October 29, 2021, the Company reclassified the liability for the GP Sponsor Private Placement Warrants to additional paid-in capital for $6.3 million. During the three months and nine months ended September 30, 2021, the key assumptions used to determine the fair value were the term period of the warrants, the risk-free rate and volatility. The Public Warrants and the Private Placement Warrants expired unexercised in October 2022. See Note 7 for further information related to the expired warrants.

The carrying amounts of the Company’s financial instruments including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued liabilities approximate fair values due to their short-term maturities. Based on borrowing rates currently available to the Company for debt with similar terms, the carrying value of capital lease obligations approximate fair value as of the respective balance sheet dates.
 
Significant Concentrations
 
The Company attributes revenues to geographic regions based on the location of its clients’ contracting entities. The following table shows revenues by geographic region (in thousands):
 
Three Months Ended
September 30,		Nine Months Ended September 30,
 2022202120222021
United States of America$53,423 $50,479 $159,616 $147,600 
International48,508 45,163 141,425 127,551 
Total$101,931 $95,642 $301,041 $275,151 
 
No clients represented more than 10% of revenue for both the three and the nine months ended September 30, 2022 and 2021. As of September 30, 2022, no clients accounted for more than 10% of total net accounts receivable. As of December 31, 2021, the Company had one customer greater than 10% of total net accounts receivable. The Company tracks its assets by physical location. As of September 30, 2022 and December 31, 2021, the net carrying value of the Company’s property and equipment located outside of the United States amounted to approximately $1.7 million and $1.5 million, respectively. As of September 30, 2022, the Company had operating lease right-of-use assets of $6.1 million, $3.7 million and $1.0 million in the United States, India and the rest of the world, respectively. As of December 31, 2021, the Company had operating lease right-of-use assets of $7.7 million, $4.7 million and $0.4 million in the United States, India and the rest of the world, respectively.
 
Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. The Company maintains its cash, cash equivalents and restricted cash at high-quality financial institutions, primarily in the United States. Deposits, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. As of September 30, 2022 and December 31, 2021, the Company had cash, cash equivalents and restricted cash with a single financial institution for an aggregate of $62.5 million and $70.6 million, respectively. As of September 30, 2022 and December 31, 2021, the Company had restricted cash of $0.4 million. The Company has never experienced any losses related to these balances.
 
Generally, credit risk with respect to accounts receivable is diversified due to the number of entities comprising the Company’s client base and their dispersion across different geographies and industries. The Company performs ongoing credit evaluations on certain clients and generally does not require collateral on accounts receivable. The Company maintains reserves for potential bad debts and historically such losses are generally not significant.