Fair Value Measurements and Fair Value of Instruments

6 Months Ended

Jun. 30, 2023

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 June 30, 2023						As of December 31, 2022
Assets on the Consolidated Balance Sheets		Carrying Value		Unrealized Losses		Fair Value		Carrying Value		Unrealized Losses		Fair Value
Cash and cash equivalents	Level 1	$	196,970	$	-	$	196,970	$	210,409	$	-	$	210,409
Restricted cash	Level 1		494		-		494		7,304		-	$	7,304
Total		$	197,464	$	-	$	197,464	$	217,713	$	-	$	217,713

The Company reports the current portion of restricted cash as a separate item in the Consolidated Balance Sheets and the non-current portion is a component of other long-term assets in the Consolidated Balance Sheets.


		As of June 30, 2023				As of December 31, 2022
Liabilities on the Consolidated Balance Sheets		Carrying Value		Fair Value		Carrying Value		Fair Value
Acquisition earnout payment	Level 3	$	4,144	$	4,144	$	5,540	$	5,540
Total liabilities		$	4,144	$	4,144	$	5,540	$	5,540

The Company reports the current portion of the acquisition earnout payment as a component of other current liabilities in the Consolidated Balance Sheets and the non-current portion is a component of other long-term liabilities on the Consolidated Balance Sheets. 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 six months ended June 30, 2023 and the year ended December 31, 2022 are as follows.


	As of
	June 30, 2023			December 31, 2022
Balance at beginning of period	$	5,540		$	5,230
Payment of earnout in connection with the iQuue acquisition		(1,702	)		-
Change in fair value of earnout		306			310
Balance at end of period	$	4,144		$	5,540

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 June 30, 2023 and December 31, 2022. The Company determined there was an increase of $306 in the fair value of the earnout primarily due to a decreased payment term as we are six months closer to the payout date, and therefore, recorded this adjustment in general and administrative expense on the Consolidated Statement of Operations and Comprehensive Loss. See Note 13 for more information regarding the earnout payment. The following table sets forth the weighted-average assumptions used to estimate the fair value of the earnout payment as of June 30, 2023 and December 31, 2022.


	As of
	June 30, 2023			December 31, 2022
Discount Rate		11.20	%		9.80	%
Volatility		42.00	%		42.00	%

- 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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