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Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Note 11. Fair Value Measurements

The Company measures certain liabilities at fair value on a recurring basis. The following tables provide details regarding the classification of these liabilities within the fair value hierarchy as of the dates presented:


	As of December 31, 2022
	Level I		Level II		Level III		Total
Liabilities
Contingent consideration obligation	$	-	$	-	$	17,337	$	17,337
Total liabilities	$	-	$	-	$	17,337	$	17,337


	As of December 31, 2021
	Level I		Level II		Level III		Total
Liabilities
Contingent consideration obligation	$	-	$	-	$	22,963	$	22,963
Total liabilities	$	-	$	-	$	22,963	$	22,963

For the liabilities presented in the tables above, there were no changes in fair value hierarchy levels during the years ended December 31, 2022 and 2021.

The changes in the fair value of Level III financial instruments are set forth below:


Contingent Consideration Liability	For the Year Ended December 31,
	2022			2021
Balance, beginning of period:	$	22,963		$	593
Additions		-			19,625
Change in fair value		1,717			3,472
Settlements		(7,343	)		(727	)
Balance, end of period:	$	17,337		$	22,963

The fair value of the contingent consideration liability represents the fair value of future payments upon satisfaction of performance targets. The assumptions used in the analysis are inherently subjective; therefore, the ultimate amount of the contingent consideration liability primarily relate to the expected future payments of obligations with a discount rate applied. The contingent consideration liability is included in contingent consideration on the Consolidated Balance Sheets. Changes in the fair value of the liability are included in contingent consideration expense on the Consolidated Statements of Operations.

- 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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