Fair Value Measurements

3 Months Ended

Jun. 30, 2022


Note 5.			Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands):


	Fair Value Measurements as of								Amortized Cost as of
	June 30, 2022								June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	14,352	$	—	$	—	$	14,352	$	14,352

Restricted cash equivalents	1,630		—		—		1,630		1,630
Total assets	$	15,982	$	—	$	—	$	15,982	$	15,982


	Fair Value Measurements as of								Amortized Cost as of
	December 31, 2021								December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	27,109	$	—	$	—	$	27,109	$	27,109
Investments	—		—		1,755		1,755		N/A
Restricted cash equivalents	1,630		—		—		1,630		1,630
Total assets	$	28,739	$	—	$	1,755	$	30,494	N/A

Restricted cash equivalents as of June 30, 2022 and December 31, 2021 primarily relate to maintaining a minimum balance of unrestricted cash at the bank. See Note 7. Debt for additional details.

Investments as of December 31, 2021 were comprised of Napster Group PLC ordinary shares received as a portion of the consideration from the disposition of our stake in Rhapsody International Inc. (doing business as Napster), which closed on December 30, 2020. The fair value of these equity securities was calculated using the closing price of the shares as of December 31, 2021. In the first quarter of 2022 these shares were acquired by a third party and we recorded the consideration expected to be received within Prepaid expenses and other current assets on our condensed consolidated balance sheet as of March 31, 2022. In the second quarter of 2022, we received cash proceeds of $1.4 million, with the remaining $0.4 million expected to be received and recorded within Prepaid expenses and other current assets on our condensed consolidated balance sheet as of June 30, 2022.

Items Measured at Fair Value on a Non-recurring Basis

Certain of our assets and liabilities are measured at estimated fair value on a non-recurring basis, using Level 3 inputs. These instruments are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Other than those discussed in Note 8. Restructuring and Other Charges, during the six months ended June 30, 2022 and 2021, we did not record any impairments on those assets required to be measured at fair value on a non-recurring basis.

- 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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