Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements

v3.23.1
Fair Value Measurements
12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis as required by ASC 820, by level, within the fair value hierarchy as of December 31, 2022 and 2021 (in thousands):
December 31, 2022
Fair Value Level 1 Level 2 Level 3
Liability
Contingent earnout shares liability $ 3,013  $ —  $ —  $ 3,013 
Warrant liability $ 17,171  $ —  $ 17,171  $ — 
December 31, 2021
Fair Value Level 1 Level 2 Level 3
Liability
Contingent earnout shares liability $ 29,057  $ —  $ —  $ 29,057 
The Company’s Contingent Earnout liability is considered “Level 3” fair value measurement. Refer to Note 2 for discussion of the Company’s methods for valuation.
The Company has a contingent obligation to issue shares of Common Stock to certain stockholders and employees upon the achievement of certain market share price milestones within specified periods. Issuances are made in three tranches of 5.0 million shares, for a total of 15.0 million shares, each upon reaching share price targets within specified time frames from December 21, 2020 ("Earnout Date"). The first tranche was not issued given the share price did not reach
$18 as of December 21, 2022. The second tranche will be issued if the share price reaches $25 within four years of the closing of the Earnout Date. The third tranche will be issued if the share price reaches $30 within five years of the Earnout Date. The tranches may also be issued upon a change of control transaction that occurs within the respective timeframes and results in per share consideration exceeding the respective share price target. As of December 31, 2022, the Company has a remaining contingent obligation to issue 10.0 million shares of Common Stock.
Following is a summary of the change in fair value of the Earnout Shares liability, Yorkville warrant liability, and the private placement warrant liability for the years ended December 31, 2022 and 2021 (in thousands).
Year Ended December 31,
Earnout Shares Liability 2022 2021
Beginning fair value $ 29,057  $ 133,503 
Change in fair value during the year (26,044) (104,446)
Ending fair value $ 3,013  $ 29,057 
Year Ended December 31,
Private Placement Warrants Liability 2021
Beginning fair value $ 6,613 
Change in fair value during the year 1,639 
Conversion of private placement warrants to public warrants (8,252)
Ending fair value $ —