FAIR VALUE MEASUREMENT |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following table sets forth the Company’s financial liabilities that were measured at fair value, on a recurring basis (in thousands):
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Short-Term Financial Assets and Liabilities The carrying values of the Company’s short-term financial assets and liabilities including cash, cash equivalents, restricted cash and short-term investments, accounts receivable, accounts payable, deferred underwriting fees, and accrued expenses approximated their fair values as of December 31, 2023 and 2022, due to their short-term nature. The Company’s restricted cash and short-term investments comprise of cash and certificate of deposits held at banks. All of the Company’s outstanding debt are recorded on an amortized cost basis. Foreign Currency Exchange Derivatives The notional amount of the foreign currency exchange derivatives outstanding as of December 31, 2023 is $9.6 million. The notional amount of a foreign currency forward contract is the contracted amount of foreign currency to be exchanged and is not recorded in the balance sheets. The changes in fair value of the foreign currency exchange derivatives are recorded in other income (expense), net in the consolidated statement of operations. For the year ended December 31, 2023 the Company recorded loss of $0.1 million, in other income (expense), net. Roll-forward of Level 3 Recurring Fair Value Measurements The following tables summarizes the fair value adjustments for liabilities measured using significant unobservable inputs (level 3) (in thousands):
The earn-out consideration represents the fair values of contingent consideration in connection with the Company’s acquisitions. See Note 7 — Acquisitions and Divestitures for further detail. The earn-out considerations are fair valued using the Monte Carlo Method and are Level 3 measurements because the Company estimates projections during the earn-out period utilizing various potential pay-out scenarios. The Monte Carlo simulation method repeats a process thousands of times in an attempt to predict all the possible future outcomes. At the end of the simulation, several random trials produce a distribution of outcomes that are then analyzed to determine the average present value of the earn-out liability. The valuation model utilized the following inputs for the valuation of the earn-out liabilities as of December 31, 2023:
The earn-out consideration is recorded in earn-out liability, net, current portion and earn-out liability, net, excluding current portion on the Company’s consolidated balance sheets. Changes to the unobservable inputs do not have a material impact on the Company’s consolidated financial statements. The Company recognized a loss of $2.7 million and a gain of $0.6 million for the remeasurement of the earn-out liabilities during the year ended December 31, 2023 and 2022, respectively, recorded as general and administrative expenses within the consolidated statements of operations. Private placement warrant liability Fair value of the warrant liability is as follows (in thousands):
The private placement warrant liability is fair valued using the Black-Scholes option-pricing model. The following table provides quantitative information regarding inputs used in the Black-Scholes option-pricing model to determine the fair value of the private placement warrants as of December 31, 2023 and 2022:
Changes to the unobservable inputs do not have a material impact on the Company’s consolidated financial statements. The Company recognized a gain of $1.2 million and a loss of $0.1 million during the years ended December 31, 2023 and 2022, respectively, recorded in changes in fair value of warrant liability within the consolidated statements of operations. There were no transfers between Level 1, Level 2 or Level 3 fair value hierarchy categories of financial instruments for the years ended December 31, 2023 and 2022. Assets Measured at Fair Value on a Nonrecurring Basis Our non-financial assets, such as goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur such that a non-financial asset is required to be evaluated for impairment and an impairment is recorded to reduce the non-financial instrument’s carrying value to the fair value as a result of such triggering events, the non-financial asset is measured at fair value when such triggering events occur. For the years ended December 31, 2023 and 2022 the Company did not record any impairment charges on non-financial assets.
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