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Fair Value Measures
 3 Months Ended
Mar. 31, 2024
Fair Value Measures [Abstract]  
Fair Value Measures

Note 4 — Fair Value Measures

 

Fair Values of Assets and Liabilities

 

In accordance with ASC Topic 820 “Fair Value Measurement”, the Company measures fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the assumptions that market participants would use in pricing an asset or liability (the inputs) are based on a tiered fair value hierarchy consisting of three levels, as follows:

 

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

 

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar instruments in active markets or for similar markets that are not active.

 

Level 3: Unobservable inputs for which there is little or no market data which require the Company to develop its own assumptions about how market participants would price the asset or liability.

 

Valuation techniques for assets and liabilities include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain.

 

At March 31, 2024 and December 31, 2023, the Company’s assets and liabilities measured at fair value on a recurring basis were as follows:

 

   March 31, 2024   December 31, 2023 
   Fair Value Measurements
Using Input Types		   Fair Value Measurements
Using Input Types		 
(In thousands)  Level 1   Level 2   Level 3   Total   Level 1   Level 2   Level 3   Total 
Assets:                                
Money market funds   4    
—
    
—
    4    4    
—
    
—
    4 
Total assets  $4   $
—
   $
—
   $4   $4   $
—
   $
—
   $4 
Liabilities:                                        
Warrant liabilities - January 2022 warrants  $
—
   $
—
   $
—
   $
—
   $
—
   $
—
   $1   $1 
Warrant liabilities - March 2022 warrants   
—
    
—
    1    1    
—
    
—
    7    7 
Warrant liabilities - August 2022 warrants   
—
    
—
    3    3    
—
    
—
    18    18 
Warrant liabilities - December 2022 warrants   
—
    
—
    413    413    
—
    
—
    1,264    1,264 
Total liabilities  $
—
   $
—
   $417   $417   $
—
   $
—
   $1,290   $1,290 

  

Fair Value of Financial Instruments

 

The Company has certain financial instruments which consist of cash and cash equivalents, marketable securities, warrant liabilities, and contingent consideration. Fair value information for each of these instruments as well as other balances of the Company are as follows:

 

●Cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and deferred revenue liabilities approximate their fair value based on the short-term nature of these instruments.

 

●Marketable securities classified as current held-to-maturity securities are recorded at amortized cost, which at March 31, 2024 and December 31, 2023, approximated fair value.

 

●The Company’s deferred consideration was recorded in connection with acquisitions during the three months ended March 31, 2024 and fiscal 2023 using an estimated fair value discount at the time of the transactions. As of March 31, 2024 and December 31, 2023, the carrying value of the deferred consideration approximated fair value.

 

●The Company’s warrant liabilities are marked-to-market each reporting period with the changes in fair value of warrant liabilities recorded in other income (expense), net in the accompanying consolidated statements of operations until the warrants are exercised. The fair value of the warrant liabilities are estimated using a Black-Scholes option-pricing model.

 

Marketable Securities

 

As of March 31, 2024 and December 31, 2023, the Company held investments in money market funds. They are valued using quoted market prices in active markets and are classified under Level 1 within the fair value hierarchy.

 

The composition of the Company’s marketable securities are as follows:

 

(In thousands)  March 31,
2024		   December 31,
2023		 
Current marketable securities:        
Money market funds  $4   $4 

 

Warrant Liabilities

 

The estimated fair value of the warrant liabilities on March 31, 2024 and 2023 is determined using Level 3 inputs. Inherent in a Black-Scholes option-pricing model are assumptions used in calculating the estimated fair values that represent the Company’s best estimate. The volatility rate is determined utilizing the Company’s own share price and the share price of competitors over time.

 

However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair values could be materially different.

 

The following table summarizes the Company’s assumptions used in the valuations as of March 31, 2024 and December 31, 2023:

 

   January 2022 Warrants   March 2022 Warrants   August 2022 Warrants   December 2022 Warrants   January 2022 Warrants   March 2022 Warrants   August 2022 Warrants   December 2022 Warrants 
   March 31, 2024   December 31, 2023 
Stock price  $0.37   $0.37   $0.37   $0.37   $1.26   $1.26   $1.26   $1.26 
Exercise price  $1,496   $430   $246   $0.38   $1,496   $430   $246   $3.45 
Expected term (in Years)   3.32    3.88    3.88    3.88    3.57    4.13    4.13    4.13 
Volatility   136.00%   138.00%   138.00%   138.00%   138.00%   136.00%   136.00%   136.00%
Discount rate - treasury yield   4.37%   4.32%   4.32%   4.32%   3.96%   3.91%   3.91%   3.91%

 

The following table sets forth a summary of the changes in the fair value of the Level 3 warrant liabilities for the three months ended March 31, 2024 and for the year ended December 31, 2023:

 

(In thousands)  March 31,
2024		   For the year
ended
December 31,
2023		 
Warrant liabilities – beginning of period  $1,290   $5,985 
Change in estimated fair value   (873)   (4,695)
Warrant liabilities –end of period  $417   $1,290