Fair Value Measurements and Fair Value of Instruments

12 Months Ended

Dec. 31, 2021

Fair Value Measurements and Fair Value of Instruments

NOTE 3. FAIR VALUE MEASUREMENTS AND FAIR VALUE OF INSTRUMENTS

The following tables display the carrying values and fair values of financial instruments.


		As of December 31, 2021						As of December 31, 2020
Assets on the Consolidated Balance Sheets		Carrying Value		Unrealized Losses		Fair Value		Carrying Value		Unrealized Losses		Fair Value
Cash and cash equivalents	Level 1	$	430,841	$	-	$	430,841		38,618	$	-	$	38,618
Restricted cash	Level 1		1,763		-		1,763		-		-		-
Total		$	432,604	$	-	$	432,604	$	38,618	$	-	$	38,618


		As of December 31, 2021				As of December 31, 2020
Liabilities on the Consolidated Balance Sheets		Carrying Value(1)		Fair Value		Carrying Value(1)		Fair Value
Term loan	Level 2	$	-	$	-	$	4,820	$	4,913
Earnout payment	Level 3		5,230		5,230		-		-
Total liabilities		$	5,230	$	5,230	$	4,820	$	4,913

(1)

The carrying values are shown inclusive of discounts and other offsets.

The fair values of the revolving line of credit and term loan, which are classified as Level 2 in the fair value hierarchy, are estimated using a discounted cash flow methodology based on market interest rate data and other market factors available at the end of the period. The input used to develop our fair value measurements as of December 31, 2020 was an effective interest rate of five percent. The Company had no outstanding balances on the revolving line of credit as of December 31, 2021, and December 31, 2020.

Earnout payments related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs. The changes in the fair value of the Company's Level 3 liabilities for the year ended December 31, 2021 are as follows.

The fair value of the earnout payment is measured on a recurring basis at each reporting date. The following inputs and assumptions were used in the Monte Carlo simulation model to estimate the fair value of the earnout payment as of December 31, 2021.

See Note 13 for more information regarding the earnout payment.

- 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.

+ References + Details

December 31, 2021

Balance at beginning of period

Fair value of earnout payment recorded in connection with iQuue acquisition

Change in fair value of earnout

Balance at end of period