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FAIR VALUE MEASUREMENT
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENT FAIR VALUE MEASUREMENT
The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period.
The following table sets forth the Company’s financial assets and liabilities that were measured at fair value, on a recurring basis:
June 30, 2024
(in thousands)Level 1Level 2Level 3Total
Assets
Foreign currency exchange derivatives1
$— $392 $— $392 
Total assets$— $392 $— $392 
Liabilities
Private placement warrant liability2
$— $— $102 $102 
Orinter earn-out consideration3
— — 4,570 4,570 
Consolid earn-out consideration4
— — 390 390 
Interep earn-out consideration5
— — 1,620 1,620 
Skypass earn-out consideration6
— — 105 105 
Total liabilities$— $— $6,787 $6,787 
December 31, 2023
(in thousands)Level 1 Level 2 Level 3 Total
Liabilities
Foreign currency exchange derivatives1
$— $300 $— $300 
Private placement warrant liability2
— — 137 137 
Orinter earn-out consideration3
— — 6,540 6,540 
Consolid earn-out consideration4
— — 780 780 
Interep earn-out consideration5
— — 2,240 2,240 
Skypass earn-out consideration6
— — 161 161 
Total liabilities$— $300 $9,858 $10,158 
______________________________
1
The Company uses foreign currency forwards contracts with maturities of up to 10 months to hedge a portion of anticipated exposures. The foreign currency exchange derivatives are recognized on the condensed consolidated balance sheet at fair value within prepaid expenses and other current assets.
2
On February 1, 2021, with the closing of its initial public offering, ITHAX consummated the sale of 675,000 private placement units, including the exercise by the underwriters of their over-allotment option. As of June 30, 2024, the Company had 232,500 private placement warrants outstanding.
3
The Orinter earn-out consideration represents arrangements to pay the former owners of Orinter, which was acquired by the Company in 2023. The undiscounted maximum payment under the arrangement is $10 million contingent on Orinter meeting certain adjusted EBITDA targets through the end of fiscal year 2025. As of June 30, 2024, $3.3 million has been paid out.
4
The Consolid earn-out consideration represents arrangements to pay the former owners of Consolid, which was acquired by the Company in 2023. The Company may be required to make earn-out payments up to an aggregate of $1 million and 400,000 shares of common stock contingent on Consolid meeting certain adjusted EBITDA targets by the end of fiscal year 2024. As of June 30, 2024, no payments have been made.
5
The Interep earn-out consideration represents arrangements to pay the former owners and key executives of Interep, which was acquired by the Company in 2023. The Company may be required to make earn-out payments of up to $3 million contingent upon Interep reaching specified EBITDA targets by the end of fiscal year 2025. As of June 30, 2024, $1.0 million has been paid out.
6
The Skypass earn-out consideration represents arrangements to pay the former owners of Skypass, which was acquired by the Company in 2023. The Company may be required to make earn-out payments of up to an aggregate of 1,800,000 shares of common stock contingent on Skypass meeting certain adjusted EBITDA targets through August 2026. In the event the EBITDA target is exceeded, the Company is required to pay on any excess of the EBITDA target, settled in shares. The number of shares payable will be calculated based on the market value of the Company’s Class A Common Stock at settlement date. As of June 30, 2024, no payments have been made.
Short-Term Financial Assets and Liabilities
The carrying values of the Company’s short-term financial assets and liabilities including cash and cash equivalents, restricted cash and short-term investments, accounts receivable, accounts payable and accrued expenses approximated their fair values as of June 30, 2024 and December 31, 2023, due to their short-term nature. The Company’s restricted cash and short-term investments comprise of cash and certificate of deposits held at banks. All of the Company’s outstanding debt are recorded on an amortized cost basis.
Foreign Currency Exchange Derivatives
The notional amount of the foreign currency exchange derivatives outstanding as of June 30, 2024 and December 31, 2023 is $7.8 million and $9.6 million, respectively. The notional amount of a foreign currency forward contract is the contracted amount of foreign currency to be exchanged and is not recorded in the balance sheets. The changes in fair value of the foreign currency exchange derivatives are recorded in other expense, net in the condensed consolidated statement of operations. For the three and six months ended June 30, 2024, the Company recorded gains of $1.0 million and $1.2 million, respectively, in other expense, net. For the three and six months ended June 30, 2023, the Company recorded gains of $0.1 million and $0.1 million, respectively, in other expense, net.
These contracts are not designated as hedging instruments and changes in fair value are recorded in other expense, net on the condensed consolidated statement of operations. Realized gains and losses from the settlement of the derivative assets and liabilities are classified as operating activities on the condensed consolidated statement of cash flows.
Roll-forward of Level 3 Recurring Fair Value Measurements
The following tables summarize the fair value adjustments for liabilities measured using significant unobservable inputs (Level 3):
Earn-out consideration
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2024202320242023
Balance, beginning of period$6,627 $3,890 $9,721 $— 
Additions of earn-out consideration with the acquisition of Orinter— — — 3,719 
Additions of earn-out consideration with the acquisition of Interep— 1,390 — 1,390 
Additions of earn-out consideration with the acquisition of Consolid— 2,520 — 2,520 
Change in the estimated fair value of earn-out consideration58 530 1,297 701 
Transfer to Level 1 earn-out payable— — (4,333)— 
Balance, end of the period$6,685 $8,330 $6,685 $8,330 
The earn-out consideration consists of the fair values of contingent consideration in connection with the Company’s acquisitions. The earn-out considerations are fair valued using the Monte Carlo Method and is a Level 3 measurement because the Company estimates projections during the earn-out period utilizing various potential pay-out scenarios. The Monte Carlo simulation method repeats a process thousands of times in an attempt to predict all the possible future outcomes. At the end of the simulation, several random trials produce a distribution of outcomes that are then analyzed to determine the average present value of the earn-out liability. The valuation model utilized the following assumptions for the valuation of the earn-out liabilities as of June 30, 2024:
OrinterInterepConsolidSkypass
Cost of equity20.9 %26.9 %28.0 %20.9 %
EBITDA volatility57.0 %57.0 %34.0 %59.0 %
Equity volatility88.0 %88.0 %68.0 %89.0 %
Required metric risk premium13.5 %17.5 %11.5 %14.0 %
Risk-neutral adjustment factor
0.88 - 0.97
0.85 - 0.96
0.97
0.81 - 0.99
In the six months ended June 30, 2024, it was determined that Orinter and Interep achieved the first of multiple operating metrics specified in the purchase agreement and, as a result, a portion of earn-out consideration was transferred to Level 1 as earn-out payable given the certainty of payments. In April 2024, the Company paid out $3.3 million and $1.0 million for Orinter and Interep earn-out considerations, respectively.
The Level 3 earn-out consideration is recorded in earn-out liability, net, current portion and earn-out liability, net, excluding current portion on the Company’s condensed consolidated balance sheets.
Changes to the unobservable inputs do not have a material impact on the Company’s consolidated financial statements. The Company recognized a loss of $0.1 million and $1.3 million for the remeasurement of the earn-out liabilities during the three and six months ended June 30, 2024, respectively, recorded as general and administrative expenses within the condensed consolidated statements of operations. The Company recognized a loss of $0.5 million and $0.7 million for the for the remeasurement of the earn-out liabilities during the three and six months ended June 30, 2023, respectively, recorded as general and administrative expenses within the condensed consolidated statements of operations.
Private placement warrant liability
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2024202320242023
Balance, beginning of period$95 $1,314 $137 $1,293 
Change in the estimated fair value of warrants7 (393)(35)(372)
Balance, end of the period$102 $921 $102 $921 
The private placement warrant liability is fair valued using the Black-Scholes option-pricing model. The following table provides quantitative information regarding inputs used in the Black-Scholes option-pricing model to determine the fair value of the private placement warrants as of June 30, 2024 and December 31, 2023:
June 30, 2024December 31, 2023
Stock price$2.40$2.76
Term (in years)3.13.6
Expected volatility78.0%73.0%
Risk-free rate4.6%4.0%
Dividend yield—%—%
Changes to the unobservable inputs do not have a material impact on the Company’s condensed consolidated financial statements. The Company recognized a $7 thousand loss and $35 thousand gain during the three and six months ended June 30, 2024, and a gain of $0.4 million and $0.4 million during the three and six months ended June 30, 2023, recorded in changes in fair value of warrant liability within the condensed consolidated statements of operations.
Besides the transfer of the realized earn-out liability amounts discussed above, there were no other transfers between Level 1, Level 2 or Level 3 fair value hierarchy categories of financial instruments for the three and six months ended June 30, 2024 and 2023.
Assets Measured at Fair Value on a Nonrecurring Basis
Our non-financial assets, such as goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur such that a non-financial asset is required to be evaluated for impairment and an impairment is recorded to reduce the non-financial asset’s carrying value to the fair value as a result of such triggering events, the non-financial assets are measured at fair value for the period such triggering events occur.
For the three and six months ended June 30, 2024 and 2023, respectively, the Company has not recorded any impairment charges on non-financial assets.