Life360, Inc. Fair Value Disclosure
| As of December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 133,959 | $ | — | $ | — | $ | 133,959 | |||||||||||||||
| Total assets | $ | 133,959 | $ | — | $ | — | $ | 133,959 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivative liability (Note 9) | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| Convertible notes (Note 8) | — | — | — | — | |||||||||||||||||||
| Total liabilities | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| As of December 31, 2023 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 41,981 | $ | — | $ | — | $ | 41,981 | |||||||||||||||
| Total assets | $ | 41,981 | $ | — | $ | — | $ | 41,981 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivative liability (Note 9) | $ | — | $ | — | $ | 217 | $ | 217 | |||||||||||||||
| Convertible notes (Note 8) | — | — | 3,449 | 3,449 | |||||||||||||||||||
| Total liabilities | $ | — | $ | — | $ | 3,666 | $ | 3,666 | |||||||||||||||
| As of December 31, 2024 | |||||||||||
Derivative liability (Note 9) | Convertible notes (Note 8) | ||||||||||
| Fair value, beginning of the year | $ | 217 | $ | 3,449 | |||||||
| Changes in fair value | 1,707 | 608 | |||||||||
Settlement of September 2021 Convertible Notes upon conversion (Note 8) | — | (3,548) | |||||||||
Gain on settlement of September 2021 Convertible Notes (Note 8) | — | (509) | |||||||||
Gain on settlement of derivative liability (Note 9) | (1,924) | — | |||||||||
| Fair value, end of period | $ | — | $ | — | |||||||
| As of December 31, 2023 | |||||||||||
Derivative liability (Note 9) | Convertible notes (Note 8) | ||||||||||
| Fair value, beginning of the year | $ | 101 | $ | 6,938 | |||||||
| Vesting of revesting notes | — | 72 | |||||||||
Changes in fair value | 116 | 684 | |||||||||
Forfeiture of revesting notes | — | (326) | |||||||||
Repayment of convertible notes (Note 8) | — | (3,919) | |||||||||
| Fair value, end of period | $ | 217 | $ | 3,449 | |||||||
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About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.