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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2023

Note 5—Fair Value of Financial Instruments

The Company’s assets and liabilities measured at fair value on a recurring basis are summarized in the following table by fair value measurement level:


$ in thousands	Level	September 30, 2023		December 31, 2022
Assets:
Investments	1	$	28,236	$	97,504
Liabilities:
Public Warrants (1)	1	$	307	$	625
Private Warrants (1)	2	9		17
Contingent consideration (2)	3	1,642		353

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(1)Included in warrant liabilities on the consolidated balance sheets.

(2)Included in other long-term liabilities on the consolidated balance sheets.

Private Warrants. The fair value of the Private Warrants approximates the fair value of the Public Warrants due to the existence of similar redemption provisions. As a result, the Company has determined that the fair value of the Private Warrants at a specific date would be similar to that of the Public Warrants, and thus their fair value is determined by using the closing price of the Public Warrants, which was $0.04 as of September 30, 2023.

Contingent Consideration. The contingent consideration was measured at fair value using a probability-weighted cash-flow method. The key inputs used in the valuation for the contingent consideration as of September 30, 2023 included the timing and probability of payment.

The following table summarizes the activities of our Level 3 fair value measurement:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
$ in thousands	2023		2022		2023		2022
Beginning balance	$	1,590	$	2,062	$	353	$	2,009

Change in fair value (1)	52		(1,116)		1,289		(1,063)

Ending balance	$	1,642	$	946	$	1,642	$	946

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(1)The changes in the fair value of the contingent consideration are reported in other income (expense), net on our consolidated statements of operations.

- 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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