Fair Value Measurements

6 Months Ended

Jul. 31, 2023

The Company’s assets and liabilities that were measured at fair value on a recurring basis were as follows:


	Fair Value Measured as of July 31, 2023
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Money market funds	$	2,343	$	—	$	—	$	2,343

Total financial assets	$	2,343	$	—	$	—	$	2,343


	Fair Value Measured as of January 31, 2023
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Money market funds	$	133,979	$	—	$	—	$	133,979
U.S. Treasury securities	—		104,966		—		104,966
Total financial assets	$	133,979	$	104,966	$	—	$	238,945

The money market funds were classified as cash and cash equivalents on the condensed consolidated balance sheets and were within Level 1 of the fair value hierarchy. The aggregate fair value of the Company’s money market funds approximated amortized cost and, as such, there were no unrealized gains or losses on money market funds as of July 31, 2023 and January 31, 2023. Realized gains and losses, net of tax, were not material for any of the periods presented.

Short-term investments, consisting of U.S. treasury securities, were classified as available-for-sale on purchase date and recorded at fair value on the condensed consolidated balance sheets. No short-term investments have been outstanding since April 30, 2023.

The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments for the six months ended July 31, 2022:


	Private placement warrant liability		ViriCiti Earnout liability
	(in thousands)
Fair value as of January 31, 2022	$	(25)	$	(5,993)
Change in fair value included in other income (expense), net	(23)		—
Effect of foreign currency translation	—		505
Reclassification of warrants to stockholders’ equity (deficit) due to exercise	48		—
Fair value as of July 31, 2022	$	—	$	(5,488)

No Level 3 financial instruments have been outstanding since January 31, 2023.

Private Placement Liability

The fair values of the private placement warrant liability are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. The significant unobservable inputs used in the fair value measurements of the private placement warrant liability include the expected volatility and dividend yield. In determining the fair value of the private placement warrant liability, the Company used the Binomial Lattice Model (“BLM”) that assumes optimal exercise of the Company's redemption option at the earliest possible date (see Note 10, Stock Warrants).

On February 21, 2022, the Company redeemed the remaining Private Placement Warrants for 0.355 shares of Common Stock per warrant. The Company recorded an immaterial loss during the three months ended April 30, 2022 classified within

change in fair value of warrant liabilities in the condensed consolidated statements of operations. No Private Placement Warrants have been outstanding since April 30, 2022.

ViriCiti Earnout Liability

On August 11, 2021, the Company acquired all of the outstanding shares of ViriCiti. The purchase price consideration included the ViriCiti Earnout, which was consideration contingent on meeting certain revenue targets through January 31, 2023. The fair value of the ViriCiti Earnout liability was previously based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. The ViriCiti Earnout liability was valued using a Monte Carlo simulation valuation model using a distribution of potential outcomes over the earnout period based on the most reliable information available. The liability is remeasured to fair value based upon the attainment against the revenue targets and changes in the fair value of earnout liabilities is presented in the consolidated statements of operations using Level 3 fair value inputs.

As of January 31, 2023, the ViriCiti Earnout liability was determined to be $7.1 million, which was based on the actual achievement of the revenue target, and was subsequently paid in full on March 6, 2023 (see Note 3, Business Combination). Thus, the liability was no longer subject to the fair value measurement and was accordingly transferred out of Level 3 fair value hierarchy, and was included in the “Accrued and other current liabilities” on the Company’s consolidated balance sheets as of January 31, 2023.

- 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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