Fair Value Measurements

12 Months Ended

Dec. 31, 2023

The Company’s debt instruments are recorded at their carrying values in its consolidated balance sheets, which may differ from their respective fair values. The estimated fair value of the Company’s 2027 Notes is based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt (see Note 8 — Debt for additional information). The fair values of the Company’s short- term loans generally approximated their carrying values.

At December 31, 2023 and 2022, the Company held currency forward contracts with an aggregated notional amount of $12,325 and $3,825, respectively, to sell United States dollars and to buy various foreign currencies such as Canadian dollars and Euro, among others, at a forward rate. Any changes in the fair value of these contracts are recorded in Other income (expense), net in the consolidated statement of operations. During the year ended December 31, 2023, the Company recorded a net loss of $848. For the years ended 2022 and 2021 the net gain (loss) were both de minimus.

The following table presents the Company’s fair value hierarchy for financial assets and liabilities:


	Fair Value Measurements as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Liabilities:


Exalos Contingent consideration — First Tranche	$	—	$	—	$	9,593	$	9,593
Exalos contingent Consideration — Second Tranche	$	—	$	—	$	4,012	$	4,012
GEO Contingent Consideration — First Tranche	$	—	$	—	$	44,709	$	44,709
GEO Contingent Consideration — Second Tranche	$	—	$	—	$	25,921	$	25,921

GEO Indemnity Holdback	$	12,704	$	—	$	—	$	12,704
Silicon Radar Contingent Consideration — First Tranche	$	—	$	—	$	2,740	$	2,740
Silicon Radar Contingent Consideration — Second Tranche	$	—	$	—	$	3,310	$	3,310
City Semi Contingent Consideration — Second Tranche	$	—	$	—	$	940	$	940

Symeo Contingent Consideration — Second Tranche	$	—	$	—	$	7	$	7


	Fair Value Measurements as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Liabilities:
Private Placement Warrants	$	—	$	—	$	17,970	$	17,970
Public Warrants	$	27,428	$	—	$	—	$	27,428
City Semi Contingent Consideration — Second Tranche	$	—	$	—	$	1,383	$	1,383
Symeo Contingent Consideration — First Tranche	$	—	$	—	$	2,000	$	2,000
Symeo Contingent Consideration — Second Tranche	$	—	$	—	$	4	$	4
Symeo Promissory Note	$	—	$	—	$	9,674	$	9,674

As of December 31, 2023 and 2022, the Company’s cash and cash equivalents were all held in cash or Level 1 instruments where the fair values approximate the carrying values.

Level 3 Disclosures

Warrants

Private Placement Warrants were valued using the Black-Scholes-Merton formula and a Monte Carlo Simulations analysis. Calculating the fair value of warrants requires the input of subjective assumptions. Other reasonable assumptions could provide differing results.

On September 22, 2023, indie announced the commencement of the Offer and the Consent Solicitation relating to its outstanding Warrants. The Company completed its exchange on November 9, 2023. As a result, no further remeasurement is

needed. The total liability as of November 9, 2023 was reclassified to Additional Paid in Capital in our consolidated balance sheet.

See Note 9 — Warrant Liability for additional information.

Contingent Considerations

Contingent considerations were valued based on the consideration expected to be transferred. The Company estimated the fair value based on a Monte Carlo Simulations analysis to simulate the probability of achievement of various milestones identified within each contingent consideration arrangement, using certain assumptions that require significant judgement and discount rates. The discount rates were based on the estimated cost of debt plus a premium, which included consideration of expected term of the earn-out payment, yield on treasury instruments and an estimated credit rating for the Company.

Because the acquisition related to Exalos occurred relatively recently, and in light of the magnitude of the transactions, the significant information to be obtained and analyzed and the fact that Exalos resides in a foreign jurisdiction, the Company’s fair value estimates for the associated contingent considerations were valued based on a probability method as of December 31, 2023.

The following table presents the significant unobservable inputs assumed for each of the fair value measurements:


	As of December 31, 2023		As of December 31, 2022
	Input		Input
Liabilities:
Warrants
Expected volatility	N/A		64.00	%
Exalos Contingent Consideration — First Tranche
Market yield rate	7.46	%	N/A
Scenario probability	75.00	%	N/A
Exalos Contingent Consideration — Second Tranche
Market yield rate	7.46	%	N/A
Scenario probability	70.00	%	N/A
GEO Contingent Consideration — First Tranche
Discount rate	12.60	%	N/A
Volatility	60.00	%	N/A
GEO Contingent Consideration — Second Tranche
Discount rate	12.60	%	N/A
Volatility	60.00	%	N/A
Silicon Radar Contingent Consideration — First Tranche
Discount rate	10.79	%	N/A
Volatility	60.00	%	N/A
Silicon Radar Contingent Consideration — Second Tranche
Discount rate	10.79	%	N/A
Volatility	60.00	%	N/A
City Semi Contingent Consideration — Second Tranche
Discount rate	12.65	%	12.65	%






Symeo Contingent Consideration — First Tranche
Discount Rate	N/A		4.73	%
Symeo Contingent Consideration — Second Tranche
Discount Rate	4.73	%	4.73	%
Symeo Promissory Note
Discount rate	N/A		3.13	%

- 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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