FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2021

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The carrying amounts of our cash and cash equivalents, accounts receivable, income taxes receivable, accounts payable, accrued expenses and income taxes payable, approximate fair value because of the short-term maturity of those instruments.

Private Placement Warrants - We record the fair value of the Private Placement Warrants as a liability in the Company’s consolidated balance sheet as of December 31, 2021 and 2020, respectively. The fair value of the Private Placement Warrants is considered a Level 3 valuation and is determined using the Black-Scholes-Merton valuation model. Changes in fair value of the Private Placement Warrants are presented under Change in the fair value of warrant liabilities on the Income Statement. As of December 31, 2021, the Company has approximately 4.0 million Private Placement Warrants outstanding.


	December 31, 2021
Private Placement Warrants Fair Value Per Share	$	0.99
Private and Public Placement Warrant valuation inputs:
Stock price	$	4.78
Strike price	$	11.50
Remaining contractual term in years	3.54
Estimated volatility	60.0		%
Dividend yield	0.0		%
Risk free interest rate	1.05		%

Contingent consideration payable related to acquisitions

The fair value of the contingent consideration payable for the Aimtell, PushPros, Aramis and Crisp Results acquisitions (described in Note 8 Acquisitions) were determined using a Monte Carlo fair value analysis based on estimated performance and the probability of achieving certain targets. As certain inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. Changes in fair value of contingent consideration are presented under Acquisition costs on the statement of operations. There was no contingent consideration payable at December 31, 2020.

The following table presents the contingent consideration assumptions.


	Aimtell / PushPros
CYE2021 Revenue - Actual	$	7,193,881
CYE2022 Revenue - Expectations	$	11,259,147
CYE2023 Revenue - Expectations	$	14,636,891
CYE2022 Risk Adjusted Revenue	$	10,883,930
CYE2023 Risk Adjusted Revenue	$	13,224,456
Revenue Volatility	25		%
Iteration (actual)	100,000
Risk adjustment discount rate	7.25		%
Risk free / Credit risk	6.5		%
Days gap from period end to payment	90

	Aramis
CYE2022 Earnout Successful Probability	99.0		%
Iteration (actual)	100,000
Risk free / Credit risk	6.5		%
Days gap from period end to payment	90

	Crisp Results
EBITDA Historical - 9 Months	7,749,580
EBITDA Expectations - 3 Months	1,800,000
Risk adjusted EBITDA	1,768,807
EBITDA volatility	60		%
Iterations (actual)	100,000
Risk adjustment discount rate	16.5		%
Risk free / Credit risk	6.5		%
Days gap from period end to payment	90

The following table presents assets and liabilities measured at fair value on a recurrent basis (in thousands):


		December 31, 2020
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Liabilities:
Private Warrant Liabilities	Total liabilities	$	—	$	—	$	22,080	$	22,080
Total		$	—	$	—	$	22,080	$	22,080


		December 31, 2021
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Liabilities:
Private Warrant Liabilities	Total liabilities	$	—	$	—	$	3,960	$	3,960
Contingent consideration - current	Contingent consideration payable					$	7,370	$	7,370
Contingent consideration -non-current	Contingent consideration payable	$	—	$	—	$	1,069	$	1,069
Total		$	—	$	—	$	12,399	$	12,399

The following table represents the change in the warrant liability and contingent consideration (in thousands):


	Private Placement Warrants		Contingent Consideration
Beginning January 1, 2020	$	—	$	1,000
Additions	13,240		—
Changes in fair value	8,840		—
Settlements	—		(1,000)
Balance December 31, 2020	22,080		—
Additions	—		7,333
Changes in fair value	(18,115)		1,106
Settlements	(5)		—
Ending December 31, 2021	$	3,960	8,439

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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