FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2021

Summary of Assets and Liabilities Not Measured at Fair Value

The table below presents the assets and liabilities that were carried at fair value on the unaudited Condensed Consolidated Balance Sheets at June 30, 2021 (in thousands):


			Estimated Fair Value
	Carrying Value June 30, 2021		Level 1		Level 2		Level 3		Total
Financial assets:
Cash Surrender Value of Life Insurance	$	7,838	$	7,838	$	—	$	—	$	7,838

Financial liabilities:
Non-qualified deferred compensation plan	$	4,854	$	4,854	$	—	$	—	$	4,854
Contingent consideration related to acquisition	21,239		—		—		21,239		21,239

The table below presents the assets and liabilities that were carried at fair value on the unaudited Condensed Consolidated Balance Sheets at December 31, 2020 (in thousands):


			Estimated Fair Value
	Carrying Value December 31, 2020		Level 1		Level 2		Level 3		Total
Financial assets:
Cash Surrender Value of Life Insurance	$	7,140	$	7,140	$	—	$	—	$	7,140
Financial liabilities:
Non-qualified deferred compensation plan	$	4,690	$	4,690	$	—	$	—	$	4,690

The table below presents the assets and liabilities that were not carried at fair value on the unaudited Condensed Consolidated Balance Sheets at June 30, 2021 (in thousands):


			Estimated Fair Value
	Carrying Value June 30, 2021		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	276,367	$	276,367	$	—	$	—	$	276,367
Restricted cash	69,299		69,299		—		—		69,299
Loans receivable, net	701,367		—		—		701,367		701,367

Financial liabilities:
Liability for losses on CSO lender-owned consumer loans	$	5,265	$	—	$	—	$	5,265	$	5,265
8.25% Senior Secured Notes	680,893		—		714,150		—		714,150
Non-Recourse U.S. SPV facility	44,489		—		—		49,456		49,456
Non-Recourse Canada SPV facility	98,881		—		—		100,209		100,209
Non-Recourse Flexiti SPE facility	194,864		—		—		199,646		199,646

The table below presents the assets and liabilities that were not carried at fair value on the unaudited Condensed Consolidated Balance Sheets at December 31, 2020 (in thousands):


			Estimated Fair Value
	Carrying Value December 31, 2020		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	213,343	$	213,343	$	—	$	—	$	213,343
Restricted cash	54,765		54,765		—		—		54,765
Loans receivable, net	467,560		—		—		467,560		467,560

Financial liabilities:
Liability for losses on CSO lender-owned consumer loans	$	7,228	$	—	$	—	$	7,228	$	7,228
8.25% Senior Secured Notes	680,000		—		646,000		—		646,000
Non-Recourse U.S. SPV facility	43,586		—		—		49,456		49,456
Non-Recourse Canada SPV facility	96,075		—		—		97,971		97,971

Summary of Equity Method Investments

The table below presents the Company's investment in Katapult (in thousands):


	Equity Method Investment		Measurement Alternative (1)		Total Investment in Katapult
Balance at December 31, 2019	$	10,068	$	—	$	10,068
Equity method (loss) - Q1 2020	(1,618)		—		(1,618)
Balance at March 31, 2020	8,450		—		8,450
Equity method income - Q2 2020	741				741
Balance at June 30, 2020	9,191		—		9,191
Equity method income - Q3 2020	3,530		—		3,530
Accounting policy change for certain securities from equity method investment to measurement alternative	(12,452)		12,452		—
Purchases of common stock warrants and preferred shares	4,030		7,157		11,187
Balance at September 30, 2020	4,299		19,609		23,908
Equity method income - Q4 2020	1,893		—		1,893
Purchases of common stock	1,570		—		1,570
Balance at December 31, 2020	7,762		19,609		27,371
Equity method income - Q1 2021	546		—		546
Balance at March 31, 2021	8,308		19,609		27,917
Equity method income - Q2 2021	1,712		—		1,712
Conversion of investment(2)	6,481		(19,609)		(13,128)
Balance at June 30, 2021	$	16,501	$	—	$	16,501

Classification as of December 31, 2020	Level 3, not carried at fair value		Level 3, carried at measurement alternative
Classification as of June 30, 2021	Level 3, not carried at fair value		N/A
(1) The Company elected to measure this equity security without a readily determinable fair value equal to its cost minus impairment. If the Company identifies an observable price change in orderly transactions for the identical or a similar investment of the same issuer, it will measure the equity security at fair value as of the date that the observable transaction occurred.
(2) On June 9, 2021, Katapult completed its previously announced merger with FinServ. As required by the merger agreement, immediately prior to the completion of the merger, the Company converted all of its preferred shares and exercised all common stock warrants. Upon this transaction, the Company’s entire investment in Katapult is accounted for under the equity method of accounting. The Company then exchanged all common shares of Katapult, immediately prior to its merger with FinServ, for $146.9 million in cash and 18.9 million common shares of the resulting public company, Katapult (NASDAQ: KPLT). The Company recorded a related net gain of $135.4 million on its equity method investment in Katapult, based on the pro rata cost basis of the investment and the discharge of the guarantee provided, for the three months ended June 30, 2021.