Table:
|  | Current | Long-Term | Total |
| --- | --- | --- | --- |
| CareSpeak Communications, Inc. | $1,500,000 | $1,500,000 | $3,000,000 |
| RMDY Health, Inc. | - | 3,720,000 | 3,720,000 |
| Total | $1,500,000 | $5,220,000 | $6,720,000 |
Paragraphs:
NOTE 9 – CONTINGENT PURCHASE PRICE
Our purchase of CareSpeak Communications contains a contingent element that will be paid only if the Company achieves certain patient engagement revenues in 2019 and 2020. The total contingent payment may be up to $3.0 million. The target patient engagement revenues were achieved in 2019 and are expected to be achieved in 2020. The calculated fair value of the contingent payment was $2,365,000 at December 31, 2018 and $3,000,000 at December 31, 2019.
Our purchase of RMDY Health, Inc. also contains a contingent element that will be paid only if the Company achieves certain revenues in 2020 and 2021 related to the RMDY business. The total contingent payment may be up to $30.0 million. The minimum payment is $1.0 million in each of the two years. The calculated fair value of the contingent payment was $3,720,000 at December 31, 2019. We determined the fair value of the Contingent Purchase Price Payable at December 31, 2019 using a Geometric-Brownian motion analysis of the expected revenue and resulting earnout payment using inputs that include the spot price, a risk free rate of return of 1.4%, a term of 2 years, and volatility of 40%. Changes in the inputs could result in a different fair value measurement.
The total fair value of contingent purchase price payable at December 31, 2019 is as follows.
Question:
How did the company determine the fair value of the Contingent Purchase Price Payable on December 31, 2019?
Answer: using a Geometric-Brownian motion analysis of the expected revenue and resulting earnout payment using inputs that include the spot price, a risk free rate of return of 1.4%, a term of 2 years, and volatility of 40%