XML 29 R14.htm IDEA: XBRL DOCUMENT

Investments

9 Months Ended

Sep. 30, 2023

7. Investments

The following table sets forth the Company’s investments:

	September 30, 2023				December 31, 2022
	Carrying Value		Cost		Carrying Value		Cost

Securrency, Inc.—Series A convertible preferred stock	$	—	$	8,112	$	8,488	$	8,112
Securrency, Inc.—Series B convertible preferred stock		305		5,500		5,500		5,500
Securrency, Inc.—secured convertible note		12,925		10,000		—		—
Securrency, Inc.—convertible note		16,190		15,000		14,500		15,000
Subtotal—Securrency, Inc.	$	29,420	$	38,612	$	28,488	$	28,612
Fnality International Limited—convertible note		7,453		6,863		6,921		6,863
Other investments		—		250		312		250
Total	$	36,873	$	45,725	$	35,721	$	35,725

Securrency, Inc.

On October 19, 2023, it was announced that Securrency, Inc. (“Securrency”) entered into an agreement to be acquired by an unrelated third party, which will result in the Company’s exit from this investment. The Company used the market approach to mark its investment in Securrency to the estimated realizable value, which resulted in a net impairment charge of $2,391 recognized during the three months ended September 30, 2023. During the nine months ended September 30, 2023, the Company recognized a net impairment charge on its investment in Securrency totaling $7,291 and additional losses of $1,777, recorded in other losses, net.

Fnality International Limited

In February 2022, the Company participated in a convertible note financing, making an investment of £5,000 ($6,863) in convertible notes of Fnality International Limited (“Fnality”), a company incorporated in England and Wales and focused on creating a peer-to-peer digital wholesale settlement ecosystem comprised of a consortium of financial institutions, offering real time cross-border payments from a single pool of liquidity. In consideration for its investment, the Company was issued a 5% Convertible Unsecured Loan Note maturing on December 31, 2023.

The note is convertible into equity shares in the event of a future qualified equity financing of Fnality. The note will convert at a conversion price equal to the lower of (i) a discount of 20% to the lowest price paid per equity share issued pursuant to such future financing round and (ii) an amount paid per share subject to a pre-money valuation cap. Mandatory conversion may occur on or after the maturity date or, if earlier, in the event a future financing round has not been completed within a specified time from an initial closing of such financing round (“Long Stop Date”), upon the approval of holders of at least 75% of the outstanding notes. The note is also convertible, at the option of the Company, following the earlier of the maturity date or such Long Stop Date.

The note is redeemable upon the occurrence of a change of control for an amount which is the greater of (i) the principal amount and all accrued interest and (ii) the amount that would be received had the note been converted to equity shares immediately prior to the occurrence of the change of control. Redemption may also occur on or after maturity or prior to maturity upon approval by holders of at least 50% and 75%, respectively, of the outstanding notes, or in connection with bankruptcy or other liquidation events.

The note is accounted for at fair value. Fair value is determined by the Company using the PWERM and is also remeasured for changes in the British pound and U.S. dollar exchange rate. During the three and nine months ended September 30, 2023, the Company recognized a loss of ($426) and a gain of $532, respectively, when remeasuring the notes to fair value.

The table below presents the probability ascribed to potential outcomes used in the PWERM (classified as Level 3 in the fair value hierarchy) and the time to exit:

	September 30, 2023			December 31, 2022
Conversion of note upon a future financing round		95	%		85%
Redemption of note upon a change of control		0	%		10%
Default		5	%		5%
Time to potential outcome (in years)		0.25			0.25

Other Investments

During the three and nine months ended September 30, 2023, the Company recognized an impairment of $312 on its other investments.