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FAIR VALUE MEASUREMENT
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENT FAIR VALUE MEASUREMENT
FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, when available. If such quoted market prices are not available, fair value is based upon models that use, as inputs, observable market-based parameters to the greatest extent possible.

Financial Assets and Liabilities Recorded at Fair Value

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands):

September 30, 2024
Level 1Level 2Level 3Total
Assets:
Investments in loans and securities (Notes)
$— $48,530 $229,685 $278,215 
Investments in loans and securities (Certificates and Other loans and receivables)
— — 645,167 645,167 
Liabilities:
Warrant liability$1,874$1,010$— $2,884

December 31, 2023
Level 1Level 2Level 3Total
Assets:
Investments in loans and securities (Notes)
$— $90,425 $— $90,425 
Investments in loans and securities (Certificates and Other loans and receivables)
— — 626,368 626,368 
Liabilities:
Warrant liability$2,106$1,136$— $3,242

Assets and Liabilities Measured at Fair Value on a Recurring Basis (Level 1 and 2)

Warrant liability (Level 1 and 2)
The Company used the value of the Public Warrants (Level 1) as an approximation of the value of the Private Warrants as they are substantially similar to the Public Warrants, but not directly traded or quoted on an active market.

The following tables summarize the Warrant liability activity for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Three Months Ended September 30, 2024
Balance as of June 30, 2024$1,671
Change in fair value1,213
Balance as of September 30, 2024$2,884
Nine Months Ended September 30, 2024
Balance as of December 31, 2023$3,242
Change in fair value(358)
Balance as of September 30, 2024$2,884
Three Months Ended September 30, 2023
Balance as of June 30, 2023$3,835
Change in fair value1,328 
Balance as of September 30, 2023$5,163
Nine Months Ended September 30, 2023
Balance as of December 31, 2022$1,400
Change in fair value3,763 
Balance as of September 30, 2023$5,163

Assets and Liabilities Measured at Fair Value on a Recurring Basis (Level 3)

Investments in Loans and Securities Available for Sale (Level 3)

As of September 30, 2024, the Company held investments in loans and securities classified as available for sale. These assets are measured at fair value using a discounted cash flow model, and presented within investments in loans and securities on the unaudited condensed consolidated balance sheets. Changes in the fair value, other than declines in fair value due to credit, are reflected in other comprehensive income (loss) on the unaudited condensed consolidated statements of comprehensive income (loss). Declines in fair value due to credit are reflected in other income (expenses), net on the unaudited condensed consolidated statements of operations.

The following tables summarize the activity related to the fair value of the investments in loans and securities available for sale (Level 3 only) for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Balance, beginning of period
$853,418$481,818$626,368$—
Transfer to Level 3(1)
——10,469339,041
Additions130,271162,903536,966432,127
Cash received(13,077)(25,942)(55,649)(78,208)
In-kind distributions— (11,460)— (11,460)
Change in fair value(19,711)3,984 (87,342)8,131 
Credit-related impairment loss, net of recoveries
(76,049)(37,316)(155,960)(115,644)
Balance, end of period
$874,852$573,987$874,852$573,987
(1) Transfer in 2023 represents a transfer from held-to-maturity to available for sale at fair value, effectuated on January 1, 2023.

The following tables summarize the activity related to the fair value of the investments in loans and securities available for sale for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Balance, beginning of period
$911,425$590,455$716,793$—
Transfer from held-to-maturity to available for sale at fair value———480,437
Additions130,268162,903538,727436,242
Cash received(23,083)(42,741)(89,905)(134,101)
In-kind distributions (non-cash)
— (12,730)— (12,730)
Change in fair value(19,179)5,083 (86,273)11,450 
Credit-related impairment loss, net of recoveries
(76,049)(37,316)(155,960)(115,644)
Balance, end of period
$923,382$665,654$923,382$665,654

Significant unobservable inputs used for our Level 3 fair value measurement of the loans and securities are the discount rate, loss rate, and prepayment rate. Significant increases or decreases in any of the inputs in isolation could result in a significantly lower or higher fair value measurement.

The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the loans and securities as of September 30, 2024 and December 31, 2023:

September 30, 2024
Unobservable InputMinimumMaximumWeighted Average
Discount rate5.0 %15.0%15.0%
Loss rate5.8 %32.7%16.9%
Prepayment rate0.0 %20.0%10.4%

December 31, 2023
Unobservable InputMinimumMaximumWeighted Average
Discount rate8.0 %15.0%15.0%
Loss rate4.9 %31.0%15.7%
Prepayment rate4.0 %40.0%9.9%

Financial Assets and Liabilities Not Recorded at Fair Value
The Company believes that the carrying amount of cash, cash equivalents and restricted cash, fees and other receivables, accounts payables and other current liabilities approximate their fair value due to the short-term maturities of these instruments.

The below tables contain information about assets that are not measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 (in thousands):
September 30, 2024
Fair Value
Carrying
Value		Level 1Level 2Level 3Total
Assets
Cash, cash equivalents and restricted cash$181,047 $181,047 $— $— $181,047 
Fees and other receivables129,063 — 129,063 — 129,063 
Total assets
$310,110 $181,047 $129,063 $— $310,110 
December 31, 2023
Fair Value
Carrying
Value		Level 1Level 2Level 3Total
Assets
Cash, cash equivalents and restricted cash$222,541 $222,541 $— $— $222,541 
Fees and other receivables113,707 — 113,707 — 113,707 
Total assets
$336,248 $222,541 $113,707 $— $336,248