Balance Sheet Detail
|6 Months Ended|
Jun. 30, 2022
|Organization, Consolidation and Presentation of Financial Statements [Abstract]|
|Balance Sheet Detail||Balance Sheet Detail
(a)Fair Value of Financial Instruments
The Company uses a three-level hierarchy, which prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information for fair value measurement based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. Fair value focuses on an exit price and is defined as 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. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risk associated with those financial instruments.
The three-level hierarchy for fair value measurements is defined as follows:
•Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;
•Level 2: Inputs to the valuation methodology included quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and
•Level 3: Inputs to the valuation methodology, which are significant to the fair value measurement, are unobservable.
An asset or liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021:
The public warrants and private placement warrants (see Note 7: Derivative Liabilities) are measured at fair value on a recurring basis. The public warrants are valued based on the closing price of the publicly traded instrument. The private placement Warrants are valued using observable inputs for similar liabilities resulting in Level 2 classification.
The earnout shares liability (see Note 7: Derivative Liabilities) is measured at fair value on a recurring basis. The fair value was determined using a Monte Carlo simulation with a risk free rate of 2.99%and 1.52% and volatility of 50.00% and 50.00% as of June 30, 2022 and December 31, 2021, respectively.
The amortized cost, unrealized gains and estimated fair values of the Company’s short-term investments as of June 30, 2022 was:
(b)Property and Equipment, Net
Property and equipment, net consist of the following as of June 30, 2022 and December 31, 2021:
The changes in the carrying amount of goodwill for the six months ended June 30, 2022, are as follows:
During the second quarter of 2022, the market price of the Company’s Class A common stock and its market capitalization declined significantly. As a result, the Company determined that a triggering event had occurred and an interim goodwill impairment assessment was performed.
The Company utilized a market approach valuation method utilizing the observable market price of the Company’s Class A common stock as it represented the best evidence of the fair value of its reporting unit. Based on the results, the Company recognized a $1,000,081 goodwill impairment during the three and six months ended June 30, 2022.
(d)Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following as of June 30, 2022 and December 31, 2021:
The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef