Grove Collaborative, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements and Fair Value of Financial Instruments (Tables)

Fair Value Measurements and Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 by level within the fair value hierarchy (in thousands):


	September 30, 2022
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	102,094	$	—	$	—	$	102,094
Total	$	102,094	$	—	$	—	$	102,094
Financial Liabilities:
Earn-Out Shares	—		—		24,345		24,345
Public Warrants	1,851		—		—		1,851
Private Placement Warrants	—		1,541		—		1,541
Total	$	1,851	$	1,541	$	24,345	$	27,737


	December 31, 2021
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	77,771	$	—	$	—	$	77,771
Total	$	77,771	$	—	$	—	$	77,771
Financial Liabilities:
Convertible preferred stock warrant liability	$	—	$	—	$	4,787	$	4,787
Total	$	—	$	—	$	4,787	$	4,787

Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table provides a summary of changes in the estimated fair value of the Additional Shares liability (in thousands):


Balance at December 31, 2021	$	—
Assumption of Additional Shares liability	15,340
Change in fair value	970
Settlement of Additional Shares liability	(16,310)
Balance at September 30, 2022	$	—

The following table provides a summary of changes in the estimated fair value of the Earn-Out liability (in thousands):


Balance at December 31, 2021	$	—
Assumption of Earn-Out liability	70,481
Change in fair value	(46,136)
Balance at September 30, 2022	$	24,345

The fair value of the preferred stock warrant liability is determined using the Black-Scholes option pricing model, which involve inherent uncertainties and the application of management’s judgment. The following table provides a summary of changes in the estimated fair value of the preferred stock warrant liability (in thousands):


Balance at December 31, 2021	$	4,787
Change in fair value	(1,616)
Net exercise of preferred stock warrants	(989)
Balance before reclassification immediately prior to the Business Combination	2,182
Reclassification to additional paid-in capital	(2,182)
Balance at September 30, 2022	$	—

Schedule of Fair Value, Liabilities Measured on Recurring Basis, Observable Input Reconciliation


	Private Placement Warrants		Public Warrants
Balance at December 31, 2021	$	—	$	—
Assumption of Private Placement and Public Warrants	3,350		4,025
Changes in fair value	(1,809)		(2,174)
Balance at September 30, 2022	$	1,541	$	1,851