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Fair Value Measurements
 3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 5 — Fair Value Measurements

The Company measures certain financial assets at fair value on a recurring basis, including cash equivalents and available-for-sale securities. The fair values of these financial assets have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

Level 1 — Fair value based on quoted prices in active markets for identical assets or liabilities.

Level 2 — Fair value based on inputs other than Level 1 inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; 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 — Fair value based on unobservable inputs that are supported by little or no market activity and such inputs are significant to the fair value of the assets or liabilities.

During the three months ended March 31, 2019 and March 31, 2018, the Company did not transfer assets or liabilities between levels of the fair value hierarchy. The following table represents the Company’s fair value hierarchy for its financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):

 

 

 

As of March 31, 2019

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds (1)

 

$

7,177

 

 

$

—

 

 

$

—

 

 

$

7,177

 

Total Assets:

 

$

7,177

 

 

$

—

 

 

$

—

 

 

$

7,177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent purchase price (2)

 

$

—

 

 

$

—

 

 

$

(4,059

)

 

$

(4,059

)

Total Liabilities:

 

$

—

 

 

$

—

 

 

$

(4,059

)

 

$

(4,059

)

 

 

 

As of December 31, 2018

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds (1)

 

$

255

 

 

$

—

 

 

$

—

 

 

$

255

 

Total Assets:

 

$

255

 

 

$

—

 

 

$

—

 

 

$

255

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent purchase price (2)

 

$

—

 

 

$

—

 

 

$

(4,196

)

 

$

(4,196

)

Total Liabilities:

 

$

—

 

 

$

—

 

 

$

(4,196

)

 

$

(4,196

)

 

(1)

Included in cash and cash equivalents.

(2)

$1.8 million is included in accrued expenses and other current liabilities, and $2.3 million and $2.4 million is included in non-current liabilities as of March 31, 2019 and December 31, 2018, respectively. 

Level 3 liabilities at March 31, 2019 consist entirely of the contingent purchase price related to the acquisition of FeedbackNow. Changes in the fair value of Level 3 contingent consideration for the three months ended March 31, 2019 were as follows (in thousands):

 

 

Contingent

 

 

Consideration

 

Balance at December 31, 2018

$

(4,196

)

Fair value adjustment of contingent purchase

   price (1)

 

88

 

Foreign exchange effect

 

49

 

Balance at March 31, 2019

$

(4,059

)

 

(1)

This amount was recognized as a reduction in acquisition and integration costs within the Consolidated Statements of Operations. As of March 31, 2019, the significant unobservable inputs used in the Monte Carlo simulation to fair value the contingent consideration included projected contract bookings, a discount rate of 17.8%, and revenue volatility of 24.4%. Increases or decreases in the inputs would result in a higher or lower fair value measurement.