Commitments and Contingencies Litigation The Company, in the normal course of business, is subject to claims and litigation. Management believes that there are no outstanding claims or assessments against the Company that would result in a material unfavorable outcome. Contingent Consideration TRA Concurrent with Parents acquisition of Array Technologies Patent Holdings Co., LLC (the Patent LLC), Array Tech, Inc. (f/k/a Array Technologies, Inc.) entered into a TRA with the former majority shareholder of Array. The TRA is valued based on the future expected payments under the agreement. The TRA provides for the payment by Array Tech, Inc. (f/k/a Array Technologies, Inc.) to the former owners for certain federal, state, local and non-U.S. tax benefits deemed realized in post-closing taxable periods by Array, from the use of certain deductions generated by the increase in the tax value of the developed technology. The TRA is accounted for as contingent consideration and subsequent changes in fair value of the contingent liability are recognized in general and administrative in the accompanying consolidated statements of operations. At September 30, 2020 and December 31, 2019, the fair value of the TRA was $18.3 million and $17.8 million, respectively. Estimating the amount of payments that may be made under the TRA is by nature imprecise. The significant fair value inputs used to estimate the future expected TRA payments to the former owners include the timing of tax payments, a discount rate, book income projections, timing of expected adjustments to calculate taxable income and the projected rate of use for attributes defined in the TRA. Payments made under the TRA consider tax positions taken by the Company and are due within 125 days following the filing of the Companys U.S. federal and state income tax returns under procedures described in the agreement. The current portion of the TRA liability is based on tax returns. The TRA will continue until all tax benefit payments have been made or the Company elects early termination under the terms described in the TRA. As of September 30, 2020, the undiscounted future expected payments through December 31, under the TRA are as follows (in thousands): Amount 2020 $ 7,414 2021 1,692 2022 1,748 2023 1,748 2024 1,748 2025 and thereafter 10,931 $ 25,281 Earn-Out Liability The Company is required to pay the selling stockholders of Array future contingent consideration consisting of earn-out payments in the form of cash upon the occurrence of certain events, including the sale, transfer, assignment, pledge, encumbrance, distribution or disposition of shares held by the acquirer to a third party; initial public offering of the equity securities of Parent, acquirer or the Company; the sale of equity securities or assets of Parent, acquirer or the Company to a third-party; or a merger, consolidation, recapitalization or reorganization of Parent, acquirer or the Company. The maximum aggregate earn-out consideration is $25.0 million. The earn-out liability is included in contingent consideration in the accompanying consolidated balance sheets in the amount of $15.9 million and $0.4 million at September 30, 2020 and December 31, 2019, respectively. The fair value of the earn-out liability was initially determined as of the acquisition date using unobservable inputs. These inputs include the estimated amount and timing of future cash flows, the probability of a qualifying event occurring, and a risk-free rate used to adjust the probability-weighted cash flows to their present value. Subsequent to the acquisition date, at each reporting period, the earn-out liability is re-measured to fair value with changes in fair value recorded in general and administrative in the accompanying consolidated statements of operations. The following table summarizes the liability related to the estimated contingent consideration (in thousands): TRA Earn-Out Liability Contingent Consideration Balance, June 30, 2019 $ 15,378 $ 442 $ 15,820 Fair value adjustment 1,968  1,968 Balance, September 30, 2019 $ 17,346 $ 442 $ 17,788 Balance, June 30, 2020 $ 18,845 $ 1,822 $ 20,667 Fair value adjustment (521) 14,112 13,591 Balance, September 30, 2020 $ 18,324 $ 15,934 $ 34,258 TRA Earn-Out Liability Contingent Consideration Balance, December 31, 2018 $ 17,168 $ 442 $ 17,610 IRS Settlement (2,727)  (2,727) Fair value adjustment 2,905  2,905 Balance, September 30, 2019 $ 17,346 $ 442 $ 17,788 Balance, December 31, 2019 $ 17,808 $ 442 $ 18,250 Fair value adjustment 516 15,492 16,008 Balance, September 30, 2020 $ 18,324 $ 15,934 $ 34,258 The TRA and earn-out liabilities require significant judgment and are classified as Level 3 in the fair value hierarchy.