Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements

v3.21.1
Fair Value Measurements
12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 5. Fair Value Measurements

         

There were no transfers into or out of Level III during the year ended December 31, 2020. The changes in the fair value of contingent consideration are summarized below (in thousands):

 

 

 

Fair Value

Measurements at

Reporting Date

Using Level III Inputs

 

Fair value at December 31, 2018 and 2019

 

$

750

 

Payment of contingent consideration

 

$

(347

)

Contingent consideration from business

   combination

 

 

170

 

Change in fair value of contingent consideration

 

 

 

Fair value at December 31, 2020

 

$

573

 

 

As of the acquisition date of HunchLab (see Note 4, Business Acquisitions) and as of December 31, 2018, the Company estimated, based on (i) the probability of achieving the relevant revenues targets and (ii) the timing of achieving such targets, that the fair value of the contingent consideration approximates the maximum amount payable. There was no change in fair value during the years ended December 31, 2020 and 2019. In January 2020, the Company paid $0.3 million based on revenues generated over the first year of the contingent earnout period. In February 2021, subsequent to December 31, 2020, the Company paid the remaining $0.4 million of the contingent earnout based on revenues generated over the second year of the contingent earnout period.

 

Using a Monte Carlo Simulation approach, the Company estimated the fair value of the contingent consideration at the acquisition date of LEEDS to be $0.2 million. The Company estimated cash flows relevant to the revenue targets over the contingent consideration period fiscal years 2021 and 2022. The asset volatilities used in the model ranged from 34.2% to 54.5%. The revenue volatilities used in the model ranged from 8.3% to 13.2%.