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FAIR VALUE | 9 Months Ended
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Sep. 25, 2022
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE The following tables present information about the Company’s financial liabilities measured at fair value on a recurring basis:
|  |  | Fair Value Measurements as of September 25, 2022 |  |  |  | Fair Value Measurements as of December 26, 2021
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
(dollar amounts in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration | 18,322 |  |  | — |  |  | — |  |  | 18,322 |  |  | 20,477 |  |  | — |  |  | — |  |  | 20,477 |
Total | $ | 18,322 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,322 |  |  | $ | 20,477 |  |  | $ | — |  |  | $ | — |  |  | $ | 20,477 |
The fair value of the contingent consideration was determined based on significant inputs not observable in the market. In connection with the acquisition of Spyce on September 7, 2021, the former equity holders of Spyce may receive up to 714,285 additional shares of Class A Common Stock, calculated based on the initial offering price of the Company’s Class A common stock of $28.00 per share sold in the Company’s IPO (the “Reference Price”), contingent on the achievement of certain performance milestones between the closing date of the acquisition and June 30, 2026. See Note 6. Additionally, the former equityholders of Spyce may receive true-up payments in cash as follows: if (i) as of the second anniversary of the closing date of the acquisition, the 30-Day Volume-Weighted Average Price of the Company’s Class A common stock (“VWAP Price”) is less than the Reference Price, then the Company shall pay to each former equityholder of Spyce that has continually held its shares of the Company’s Class A common stock the delta between the Reference Price and the VWAP Price for the upfront portion of the purchase price and (ii) as of the date of the achievement of any of the three milestones, the VWAP Price as of such milestone achievement date is less than the Reference Price, then the Company shall pay to each former equityholder of Spyce that is eligible to receive a milestone payment the delta between the Reference Price and the VWAP Price for the contingent consideration associated with such milestone. The contingent consideration was valued using the Monte Carlo method. The analysis considered, among other items, the equity value, the contractual terms of the Spyce merger agreement, potential liquidity event scenarios (prior to the IPO), the Company’s credit adjusted discount rate, equity volatility, risk-free rate and the probability of milestone targets required for issuance of shares under the contingent consideration will be achieved. The following table provides a roll forward of the aggregate fair values of the Company’s contingent consideration, for which fair value is determined using Level 3 inputs.
(dollar amounts in thousands) | Contingent Consideration
Balance—December 26, 2021 | $ | 20,477 |
Change in fair value | (2,155) |
Balance—September 25, 2022 | $ | 18,322 |
The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the thirteen and thirty-nine weeks ended September 25, 2022 and September 26, 2021, reflecting certain property and equipment for which an impairment loss was recognized during the corresponding periods, see Note 1:
|  |  | Fair Value Measurements as of September 25, 2022 |  | Thirteen Weeks Ended September 25, 2022 |  | Thirty-Nine Weeks Ended September 25, 2022
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Impairment Losses
(dollar amounts in thousands) |  |  |  |  |  |  |  |  |  |  |
Certain property and equipment, net | — |  |  | — |  |  | — |  |  | — |  |  | 1,693 |  |  | 1,693 |
|  |  | Fair Value Measurements as of September 26, 2021 |  | Thirteen Weeks Ended September 26, 2021 |  | Thirty-Nine Weeks Ended September 26, 2021
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Impairment Losses
(dollar amounts in thousands) |  |  |  |  |  |  |  |  |  |  |
Certain property and equipment, net | — |  |  | — |  |  | — |  |  | — |  |  | 4,415 |  |  | 4,415 |
The fair value of the related property and equipment as of September 25, 2022 and September 26, 2021 was determined to be $0 and represents a Level 3 fair value measurement.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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