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Fair Value Measurement
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurement

16. Fair Value Measurement

 

The Company’s financial instruments consist of level 1, Level 2 and level 3 assets as of December 31, 2024 and 2023. As of December 31, 2024 and 2023, the Company’s cash and cash equivalents of $4,362 and $9,284, respectively, were Level 1 assets and included savings deposits, overnight investments, and other liquid funds with financial institutions.

 

The Company accounted for certain common stock issued in connection with the acquisition of Fexy Studios that was subject to a put option (which provided for a cash payment to the sellers on the first anniversary date of the closing (or January 11, 2024) in the event the common stock trading price on such date was less than the common stock trading price on the day immediately preceding the acquisition date, or $8.10 per share), as a derivative liability, which required the Company to carry such amounts on its consolidated balance sheets as a liability at fair value, as adjusted at each reporting period-end.

 

Fexy Put Option – The Company accounted for certain common stock issued in connection with the Fexy Studios acquisition that was subject to a put option (the “Fexy Put Option”), which provides for a cash payment to the sellers on the first anniversary date of the closing (on January 11, 2024) in the event the common stock trading price on such date was less than the common stock trading price on the day immediately preceding the acquisition date of $8.10 per share, as a derivative liability, which required the Company to carry such amounts on the consolidated balance sheets as a liability at fair value, as adjusted at each reporting period-end.

 

On February 15, 2024, in connection with the contingent consideration related to the acquisition of Fexy Studios, the Company agreed to pay the amount due of $2,478 in four (4) equal installments of approximately $620 starting February 16, 2024 (paid $620 in February 2024) and then on the 15th day of March (paid $620 in March 2024), April (paid $620 in April 2024) and May (paid $620 in May 2024) of 2024 comprised of the following: (i) $2,225 pursuant to the Fexy Put Option where the Company gave the recipients of the contingent consideration a right to put their 274,692 shares of the Company’s common stock; (ii) $200 deferred payment due under the purchase agreement; and (iii) $53 in other costs and reimbursable transition expenses payable. During the nine months ended December 31, 2024, the Company paid the Fexy Put Option and recorded the repurchase of 274,692 shares of the Company’s common stock issued in connection with the acquisition, resulting in a loss of $379 as reflected on the consolidated statements of stockholders’ deficiency.

 

The Company’s Term Debt (as described below), carried at amortized cost, with a carrying value of $110,436 and $102,309 as of December 31, 2024 and 2023, respectively, its Simplify Loan (as described below) carried at amortized cost, has a carrying value of $10,651 as of December 31, 2024, and its Bridge Notes, carried at amortized cost, has a carrying value of $7,887 as of December 31, 2023.

 

 

Liabilities measured at fair value on a recurring basis consisted of the following December 31, 2023:

 

   Fair Value  

Quoted Prices in Active Markets for Identical Assets

(Level 1)

  

Significant Other Observable Inputs

(Level 2)

  

Significant Unobservable Inputs

(Level 3)

 
Contingent consideration  $1,571   $-   $1,571   $        - 

 

Contingent Consideration – The fair value of the contingent consideration was primarily dependent on the common stock trading price on the first anniversary of the closing of the Fexy Studios acquisition, or January 11, 2024. As of December 31, 2023, the estimated fair value was calculated based on the $8.10 put option amount based on the exercise price of the Company’s common stock at the acquisition date, less the $2.38 the Company’s common stock trading price as of the reporting date, or $5.72 per share, multiplied by the number of shares subject to the put option of 274,692, which approximated the value if the Black-Scholes option-pricing model was used given the proximity date of the put option.

 

For the years ended December 31, 2024 and 2023, the loss in change in valuation of the contingent consideration of $313 and $1,010, respectively, was recognized in other expense on the consolidated statements of operations and comprehensive loss.