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Fair Value Measurements

3 Months Ended

Mar. 31, 2025

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 and 2029 Notes are both based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt (see Note 6 — Debt for additional information). The fair values of the Company’s short-term loans generally approximated their carrying values.

At March 31, 2025 and 2024, the Company held currency forward contracts with an aggregated notional amount of $24,532 and $22,987, 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, 2025 and 2024, the Company recorded a net loss of $601 and $552, respectively.

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


	Fair Value Measurements as of March 31, 2025
	Level 1		Level 2		Level 3		Total
Liabilities:
Kinetic Contingent Consideration - First Tranche	$	—	$	—	$	2,455	$	2,455
Kinetic Contingent Consideration - Second Tranche	$	—	$	—	$	413	$	413
Exalos Contingent Consideration - Second Tranche	$	—	$	—	$	6	$	6


	Fair Value Measurements as of December 31, 2024
	Level 1		Level 2		Level 3		Total
Liabilities:
Kinetic Contingent Consideration - First Tranche	$	—	$	—	$	2,455	$	2,455
Kinetic Contingent Consideration - Second Tranche	$	—	$	—	$	1,908	$	1,908
Exalos Contingent Consideration — Second Tranche	$	—	$	—	$	634	$	634
GEO Indemnity Holdback	$	6,344	$	—	$	—	$	6,344
City Semi Contingent Consideration — Second Tranche	$	—	$	—	$	500	$	500

As of March 31, 2025 and December 31, 2024, the Company’s cash and cash equivalents, including restricted cash, 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.

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


	March 31, 2025		December 31, 2024
	Input		Input
Liabilities:



Kinetic Contingent Consideration - Second Tranche
Market yield rate	8.65	%	7.68	%
Scenario probability	15.00	%	70.00	%
Exalos Contingent Consideration - Second Tranche
Discount rate	10.23	%	10.20	%
Volatility	60.00	%	60.00	%

- 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.

+ References

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