Fair Value Measurements

3 Months Ended

Mar. 31, 2024

The Company’s debt instruments are recorded at their carrying values in its condensed 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 7 — Debt for additional information). The fair values of the Company’s short-term loans generally approximated their carrying values.

At March 31, 2024 and 2023, the Company held currency forward contracts with an aggregated notional amount of $22,987 and $4,025, 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 condensed consolidated statement of operations. During the three months ended March 31, 2024, the Company recorded a net loss of $552. During the three months ended March 31, 2023, the Company recorded a net loss that was de minimus.

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


	Fair Value Measurements as of March 31, 2024
	Level 1		Level 2		Level 3		Total
Liabilities:
Exalos Contingent Consideration - First Tranche	$	—	$	—	$	6,504	$	6,504
Exalos Contingent Consideration - Second Tranche	$	—	$	—	$	4,070	$	4,070
GEO Contingent Consideration - First Tranche	$	—	$	—	$	42,060	$	42,060
GEO Contingent Consideration - Second Tranche	$	—	$	—	$	14,020	$	14,020
GEO Indemnity Holdback	$	11,091	$	—	$	—	$	11,091
Kinetic Contingent Consideration - First Tranche	$	—	$	—	$	2,288	$	2,288
Kinetic Contingent Consideration - Second Tranche	$	—	$	—	$	2,386	$	2,386
Silicon Radar Contingent Consideration - First Tranche	$	—	$	—	$	6,820	$	6,820
Silicon Radar Contingent Consideration - Second Tranche	$	—	$	—	$	2,970	$	2,970
City Semi Contingent Consideration - Second Tranche	$	—	$	—	$	460	$	460
Symeo Contingent Consideration - Second Tranche	$	—	$	—	$	7	$	7


	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

As of March 31, 2024 and December 31, 2023, 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

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 acquisitions related to Exalos and Kinetic 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 March 31, 2024.

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


	March 31, 2024		December 31, 2023
	Input		Input
Liabilities:
Exalos Contingent Consideration - First Tranche
Market yield rate	7.70	%	7.46	%
Scenario probability	50.00	%	75.00	%
Exalos Contingent Consideration - Second Tranche
Market yield rate	7.70	%	7.46	%
Scenario probability	70.00	%	70.00	%
GEO Contingent Consideration - First Tranche
Discount rate	13.30	%	12.60	%
Volatility	60.00	%	60.00	%
GEO Contingent Consideration - Second Tranche
Discount rate	13.30	%	12.60	%
Volatility	60.00	%	60.00	%
Kinetic Contingent Consideration - First Tranche
Market yield rate	8.87	%	N/A
Scenario probability	100.00	%	N/A
Kinetic Contingent Consideration - Second Tranche
Market yield rate	8.87	%	N/A
Scenario probability	95.00	%	N/A
Silicon Radar Contingent Consideration - First Tranche
Discount rate	11.03	%	10.79	%
Volatility	60.00	%	60.00	%
Silicon Radar Contingent Consideration - Second Tranche
Discount rate	11.03	%	10.79	%
Volatility	60.00	%	60.00	%
City Semi Contingent Consideration - Second Tranche
Discount rate	12.65	%	12.65	%
Symeo Contingent Consideration - Second Tranche
Discount Rate	4.73	%	4.73	%

- 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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