Company: IBTA
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001628280-25-008240
Chunk: 29

Company: Ibotta, Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 29
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 $25,400 The Company’s cash equivalents are held in money market funds, which are measured using quoted prices for identical assets in active markets and are therefore classified as Level 1 in the fair value hierarchy. As of December 31, 2023, the estimated fair value of the Company’s convertible notes was $95.4 million. Long-term debt is recorded at its carrying value in the balance sheets, which may differ from its fair value. The fair value is estimated using Level 3 inputs in a Monte Carlo simulation. Convertible Notes Derivative LiabilityThe convertible notes contain certain embedded features that are required to be bifurcated and recorded separately from the debt host as a derivative liability at fair value. Refer to Note 6 – Long-Term Debt for further information.The fair value of the derivative liability was determined using a Monte Carlo simulation and a “with-and-without” valuation methodology. The inputs used to estimate the fair value of the derivative instrument include the probability of potential settlement scenarios, the expected timing of such settlement, and an expected volatility determined with reference to historical stock volatilities of 

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Table of ContentsIbotta, Inc.Notes to Financial Statements

comparable guideline public companies. The derivative liability is classified as Level 3 in the fair value hierarchy.The following table summarizes the activity related to the fair value of the convertible notes derivative liability (in thousands):Year ended December 31,20242023Fair value at beginning of period$25,400 $20,400 Initial recognition of derivative liability– – Change in fair value3,085 5,000 Settlement of derivative liability$(28,485)$– Fair value at end of period$– $25,400 Concurrently upon closing of the IPO, the $75.1 million of convertible notes automatically converted into 1,177,087 shares of the Company’s Class A common stock, and the conversion was accounted for as a debt extinguishment. Immediately prior to the extinguishment, a $1.4 million loss was recognized from the change in fair value of the embedded derivative liability.Equity InvestmentOn July 2, 2019, the Company acquired 628,930 shares of the Series A Preferred Stock of a privately-held software company in exchange for cash consideration of $0.8 million. The investment represents a minority interest, and the Company has determined that we do not have significant influence over the company. The preferred shares comprising the investment are illiquid, and the fair