v3.25.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements

4. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value. Fair value is determined based on the exit price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy:

 

Level 1 -

Quoted prices in active markets for identical assets or liabilities.

 

 

Level 2 -

Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

 

Level 3 -

Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

 

The Company’s population of financial assets and liabilities subject to fair value measurements on a recurring basis is as follows:

 

 

Fair Value as of March 31, 2025

 

Recurring fair value measurements

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Money market funds

 

$

2,277

 

 

$

—

 

 

$

—

 

 

$

2,277

 

Contingent purchase consideration (1)

 

 

—

 

 

 

—

 

 

 

(2,848

)

 

 

(2,848

)

Derivative liability (2)

 

 

—

 

 

 

—

 

 

 

(471

)

 

 

(471

)

 

$

2,277

 

 

$

—

 

 

$

(3,319

)

 

$

(1,042

)

 

 

 

 

Fair Value as of December 31, 2024

 

Recurring fair value measurements

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Money market funds

 

$

8,853

 

 

$

—

 

 

$

—

 

 

$

8,853

 

Contingent purchase consideration (1)

 

 

—

 

 

 

—

 

 

 

(2,925

)

 

 

(2,925

)

 

$

8,853

 

 

$

—

 

 

$

(2,925

)

 

$

5,928

 

 

(1) Contingent purchase consideration represents a liability recorded at fair value in connection with the acquisition of Otonomo, and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent purchase consideration was estimated based on the fair value of the Company’s shares issuable on a contingent basis. Contingent purchase consideration is included in Accrued expenses in the condensed consolidated balance sheets.

(2) The derivative liability represents a contingent promise to issue additional consideration in the form of common stock or warrants which is bifurcated from the underlying term loan and is carried at fair value. The changes in the fair value of the derivative liability are recorded as Change in fair value of derivative liability in the condensed consolidated statements of operations.

Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Since derivative financial instruments are initially and subsequently carried at fair value, the Company’s income will reflect the volatility in these estimate and assumption changes. The fair value of the derivative liability was estimated based on its total value, adjusted to reflect the weighted probability of the occurrence of the contingent event.

The following table sets forth a summary of the changes in the fair value of the contingent purchase consideration and derivative liability:

 

 

 

Contingent Purchase Consideration

 

 

Derivative Liability

 

Fair value at January 1, 2025

 

$

2,925

 

 

$

—

 

Issuance

 

 

—

 

 

 

508

 

Change in fair value

 

 

(77

)

 

 

(37

)

Fair value as of March 31, 2025

 

$

2,848

 

 

$

471

 

 

The carrying values for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and long-term debt approximated fair value as of March 31, 2025 and December 31, 2024.