Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Note 11 — Fair Value Measurements

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2021 (in thousands):


Description	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market account	$	100,000	$	—	$	—	$	100,000
Total financial assets	$	100,000	$	—	$	—	$	100,000
Liabilities:
Contingent consideration	$	—	$	—	$	13,700	$	13,700
Total financial liabilities	$	—	$	—	$	13,700	$	13,700

The following table presents a summary of the changes in fair value of the Company's Level 3 financial instruments:


in thousands	Contingent Consideration
Fair value as of January 1, 2021	$	—
Recognition of contingent consideration liability upon acquisition		18,400
Gain on change in fair value included in other income, net		4,700
Fair value as of December 31, 2021	$	13,700

Money market account is included within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

The fair value of contingent consideration related to Apollo acquisition is classified as Level 3 financial instruments. To determine the fair value of the contingent consideration, the Company used Monte Carlo simulation model. The Monte Carlo simulation considered assumptions including revenue volatilities, risk free rates, discount rates and additional revenue discount rate. Additionally, other key

assumptions included forecasted revenue from new customers and probability of achieving it. The following table sets forth the range of inputs for the significant assumptions utilized to determine the fair value of contingent consideration:


	Contingent Consideration
Risk-free interest rate		0.56	%
Expected revenue volatility		20.0	%
Revenue discount rate		5.50	%
Discount rate		3.25	%

- 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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