Grove Collaborative, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

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

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

12 Months Ended

Dec. 31, 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 December 31, 2022 and December 31, 2021 by level within the fair value hierarchy (in thousands):


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	74,990	$	—	$	—	$	74,990
Total	$	74,990	$	—	$	—	$	74,990
Financial Liabilities:
Additional Shares	$	—	$	—	$	580	$	580
Earn-Out Shares	—		—		4,122		4,122
Private Placement Warrants	—		670		—		670
Public Warrants	805		—		—		805
Structural Derivative Liability	—		—		7,050		7,050
Total	$	805	$	670	$	11,752	$	13,227


	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 Backstop Additional Shares liability	15,340
Change in fair value of Backstop Additional Shares liability	970
Settlement of Backstop Additional Shares liability	(16,310)
Issuance of HGI Additional Shares liability	823
Change in fair value of HGI Additional Shares Liability	(243)
Balance at December 31, 2022	$	580

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	(66,359)
Balance at December 31, 2022	$	4,122

The following table provides a summary of changes in the estimated fair value of the Structural Derivative Liability (in thousands):


Balance at December 31, 2021	$	—
Issuance of Structural Derivative Liability	7,050
Change in fair value	—
Balance at December 31, 2022	$	7,050

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 December 31, 2022	$	—

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

The following table provides a summary of changes in the estimated fair value of the Private Placement Warrants and Public Warrants (in thousands):


	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	(2,680)		(3,220)
Balance at December 31, 2022	$	670	$	805