Fair Value Disclosures

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Disclosures

12. Fair Value Disclosures

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

Level 1 is defined as observable inputs such as quoted prices in active markets for identical assets;

Level 2 is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table represents the fair value of the financial instruments measured at fair value on a recurring basis:

	As of September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents*	$	5,764	$	—	$	—	$	5,764
Total assets measured at fair value	$	5,764	$	—	$	—	$	5,764
Liabilities
Derivative liability	$	—	$	—	$	—	$	—
Warrant liability		—		—		—		—
Acquisition related liabilities		—		—		24,886		24,886
Total liabilities measured at fair value	$	—	$	—	$	24,886	$	24,886

	As of December 31, 2020
Assets	Level 1		Level 2		Level 3		Total
Cash and cash equivalents*	$	12,257	$	—	$	—	$	12,257
Total assets measured at fair value	$	12,257	$	—	$	—	$	12,257
Liabilities
Derivative liability	$	—	$	—	$	38,400	$	38,400
Warrant liability		—		—		19,700		19,700
Acquisition related liabilities		—		—		23,155		23,155
Total liabilities measured at fair value	$	—	$	—	$	81,255	$	81,255

* Includes cash invested by the Company in certain money market accounts with a financial institution.

As noted above in Note 7, as of September 30, 2021 and December 31, 2020, the Company determined that the Term Loan is classified as Level 3 and the relevant fair values were approximately equal to the book value as of September 30, 2021 and $152,538 as of December 31, 2020.

The following table reconciles the changes in the fair value of the liabilities categorized within Level 3 of the fair value hierarchy for the nine months ended September 30, 2021 and year ended December 31, 2020:

	Warrant liability		Acquisition related liabilities		Derivative liability
Balance as of January 1, 2021	$	19,700	$	23,155	$	38,400
Additions, net of payments		—		1,744		—
Change in fair value		4,400		(13)		600
Extinguishment of the warrant and derivative liabilities		(24,100)		—		(39,000)
Balance as of September 30, 2021	$	—	$	24,886	$	—

In connection with certain business combinations, the Company may owe additional purchase consideration (contingent consideration included in the acquisition related liabilities) based on the financial performance of the acquired entities after their acquisition. The fair value of the contingent consideration was determined using an unobservable input such as projected revenues or collections of accounts receivables. Changes in any of the assumptions related to the unobservable inputs identified above may change the contingent consideration’s fair value.