The Company’s money market funds are categorized as Level 1 within the fair value hierarchy. As of September 30, and June 30, 2024, the Company’s cash and cash equivalents were as follows:

As of September 30, and June 30, 2024, the Company’s contingent consideration liabilities related to acquisitions are categorized as Level 3 within the fair value hierarchy. Contingent consideration was valued at September 30, and June 30, 2024 using unobservable inputs, primarily internal revenue forecasts. Contingent consideration was valued at the time of acquisitions using unobservable inputs and have included using the Monte Carlo simulation model. This model incorporated revenue volatility, internal rate of return, and a risk-free rate. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance, at times, of a third-party valuation specialist.

As of September 30, 2024, the Company’s contingent consideration liabilities current and non-current balances were as follows:

Revenue projections for Brightline Interactive, LLC (“BLI”) are expected to trigger potential additional gross consideration of $3.0 million over the remainder of the contingent consideration payout period ending in July 2025, payable in cash. The possibility of achieving any remaining revenue targets to trigger additional consideration is remote. Accordingly, contingent consideration remaining for the BLI acquisition at September 30, 2024 is calculated at the present value of the estimated remaining $3.0 million cash discounted at risk-free interest rates from the estimated payment dates. The range of potential additional contingent consideration related to BLI in excess of the amounts reflected on the balance sheet at September 30, 2024 is zero to $10.0 million (which is considered remote and no provision is made for it), of which up to $7.5 million is in cash and the remainder in the form of Company common stock (with share conversion at a $7.00 per share floor price).

The change in fair value of contingent consideration for BLI for the three months ended September 30, 2024 was a non-cash expense of approximately $0.07 million included as change in fair value of acquisition contingent consideration in the condensed consolidated statements of operations. This reflects the change in the time value of money related to the present value of payment calculation.

The change in fair value of contingent consideration for XR Terra, LLC (“XRT”) for the three months ended September 30, 2024 was a non-cash gain of approximately $0.04 million included as change in fair value of acquisition contingent consideration in the condensed consolidated statements of operations. This reflects the reversal of the estimated final consideration payment related to the acquisition of XRT. The contingent consideration payout period ended September 2024.

As of June 30, 2024, the Company’s contingent consideration liabilities current and non-current balances were as follows:

	Contingent Consideration at Purchase Date		Consideration Paid			Changes in Fair Value			Fair Value		Contingent Consideration
	As of June 30, 2024
	Contingent Consideration at Purchase Date		Consideration Paid			Changes in Fair Value			Fair Value		Contingent Consideration
Level 3:
Contingent consideration, current - BLI	$	1,264,200	$	-		$	167,561		$	1,431,761	$	1,431,761
Contingent consideration, current - XRT		-		(499,288	)		535,002			35,714		35,714
Total contingent consideration, current portion	$	1,264,200	$	(499,288	)	$	702,563		$	1,467,475	$	1,467,475

Level 3:
Contingent consideration, non-current - BLI	$	6,060,700	$	(1,497,894	)	$	(3,149,110	)	$	1,413,696	$	1,413,696
Total contingent consideration, net of current portion	$	6,060,700	$	(1,497,894	)	$	(3,149,110	)	$	1,413,696	$	1,413,696

Revenue projections for BLI are expected to trigger potential additional gross consideration of $3.0 million over the remainder of the contingent consideration payout period ending in July, 2025, payable in cash. The possibility of achieving any remaining revenue targets to trigger additional consideration is remote. Accordingly, contingent consideration remaining for the BLI acquisition at June 30, 204 is calculated at the present value of the estimated remaining $3.0 million cash discounted at risk-free interest rates from the estimated payment dates.

The contingent consideration related to XRT at June 30, 2024 represents an accrual for anticipated achievement of an additional revenue threshold though the end of the contingent consideration period September 2024.

The change in fair value of contingent consideration for the three months ended September 30, 2023 was a non-cash gain of approximately $2.76 million included as change in fair value of acquisition contingent consideration in the condensed consolidated statements of operations. This was primarily driven by changes in the Company’s common stock price between the measurement dates and revisions to revenue projections for BLI and Sector 5 Digital, LLC (“S5D”).