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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2020
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Note 13 - Fair Value Measurements The Company holds investments in equity securities and limited partnership interests, which are accounted for at fair value and classified within financial assets at fair value on the condensed consolidated balance sheet, with changes in fair value recognized as investment gain / loss in the condensed consolidated statements of operations. The Company also held an investment in Nexway common stock that was publicly traded on the Frankfurt Exchange. Additionally, the Company’s convertible notes, derivatives and warrants were classified as liabilities and measured at fair value on the issuance date, with changes in fair value recognized as other income (expense) in the condensed consolidated statements of operations. The following table classifies the Company’s assets and liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2020 and December 31, 2019 (in thousands):
|  | Fair valued measured at December 31, 2020 |
|  | Quoted prices in active markets (Level 1) |  |  | Significant other observable inputs (Level 2) |  |  | Significant unobservable inputs (Level 3) |  |  | Total |
Financial liabilities at fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant liabilities |  | $ | - |  |  | $ | - |  |  | $ | 22,686 |  |  | $ | 22,686 |
Total financial liabilities at fair value |  | $ | - |  |  | $ | - |  |  | $ | 22,686 |  |  | $ | 22,686 |
|  | Fair valued measured at December 31, 2019 |
|  | Quoted prices in active markets (Level 1) |  |  | Significant other observable inputs (Level 2) |  |  | Significant unobservable inputs (Level 3) |  |  | Total |
Financial assets at fair value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial assets at fair value |  | $ | - |  |  | $ | - |  |  | $ | 1,965 |  |  | $ | 1,965 |
Total Financial Assets at Fair Value |  | $ | - |  |  | $ | - |  |  | $ | 1,965 |  |  | $ | 1,965 |
Financial liabilities at fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liability - convertible notes |  | $ | - |  |  | $ | - |  |  | $ | 1,203 |  |  | $ | 1,203 |
Profits interest sold |  |  | - |  |  |  | - |  |  |  | 1,971 |  |  |  | 1,971 |
Embedded put option |  |  | - |  |  |  | - |  |  |  | 376 |  |  |  | 376 |
Warrant liability - Subsidiary |  |  | - |  |  |  | - |  |  |  | 24 |  |  |  | 24 |
Total financial liabilities at fair value |  | $ | - |  |  | $ | - |  |  | $ | 3,574 |  |  | $ | 3,574 |
Derivative Financial Instruments The following table presents changes in Level 3 liabilities measured at fair value (in thousands) for the year ended December 31, 2020 and 2019. Unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category.
|  | Derivative - Convertible Notes |  |  | Profits Interests Sold |  |  | Embedded Put Option |  |  | Warrant liabilities |
Fair value at December 31, 2018 |  | $ | 1,018 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,528 |
Change in fair value |  |  | (678 | ) |  |  | 198 |  |  |  | (137 | ) |  |  | (4,504 | )
Additions |  |  | 863 |  |  |  | 1,773 |  |  |  | 589 |  |  |  | - |
Redemption |  |  | - |  |  |  | - |  |  |  | (76 | ) |  |  | - |
Fair value at December 31, 2019 |  |  | 1,203 |  |  |  | 1,971 |  |  |  | 376 |  |  |  | 24 |
Change in fair value |  |  | (206 | ) |  |  | (1,971 | ) |  |  | (220 | ) |  |  | 83,338 |
Additions |  |  | 3,583 |  |  |  | - |  |  |  | 172 |  |  |  | 50,743 |
Redemption |  |  | (4,580 | ) |  |  | - |  |  |  | (328 | ) |  |  | (97,884 | )
Reclassification of warrant liabilities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (13,535 | )
Fair value at December 31, 2020 |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 22,686 |
Warrant Liabilities FB Loan Warrant In connection with its Note Purchase Agreement (see Note 12), the Company issued the FB Loan Warrant and the warrant liability was recorded at the date of grant at fair value. Subsequent changes in fair value during the year ended December 31, 2020 was recorded as a change in fair value of warrants in other income (expense) in the consolidated statement of operations. As of December 31, 2020, the FB Loan Warrant was fully exercised. Purchase Agreements with Investors Between May 11, 2020 and June 8, 2020, the Company entered into Purchase Agreements with certain investors (the “Investors”), pursuant to which the Company sold an aggregate of 3,735,922 shares (the “Purchased Shares”) of the Company’s common stock and issued 3,735,922 warrants to the Investors. These warrants were initially reported as warrant liabilities due to the Company’s sequencing policy disclosed in Note 3. On September 25, 2020, the Company repaid all of its variable convertible notes. As a result of this repayment, the Company was no longer subject to a sequencing policy and therefore reclassified $13.5 million of warrant liabilities to additional paid in capital as of that date. Between August 20, 2020 and September 29, 2020, the Company entered into Purchase Agreements, with certain investors (the “Investors”), pursuant to which the Company sold an aggregate of 1,843,726 shares (the “Purchased Shares”) of the Company’s common stock and issued 1,843,726 warrants to the Investors. The aggregate warrant liabilities were recorded at the date of grant at fair value of $5.5 million. Subsequent changes in fair value for the year ended December 31, 2020 were recorded as change in fair value of warrant liabilities in the consolidated statement of operations. The Company used a Black-Scholes model to estimate the fair value of the warrant liability at December 31, 2020 using the following inputs:
|  | December 31, 2020 |
Fair value of underlying common shares |  | $ | 28.00 |
Exercise price |  | $ | 9.25 |
Expected dividend yield |  |  | — | %
Expected volatility |  |  | 73.9% - 75.1 | %
Weighted average expected volatility |  |  | 74.35 | %
Risk free interest rate |  |  | 0.1% - 0.11 | %
Weighted average risk free interest rate |  |  | 10.57 | %
Expected term (years) |  |  | 1.14 - 1.24 |
Weighted average expected term (years) |  |  | 1.19 |
ARETE Wealth Management On May 25, 2020, the Company issued to ARETE Wealth Management a warrant to purchase 275,000 shares of the Company’s common stock for investment services. The warrant liability was recorded at the date of grant at fair value. Subsequent changes in fair value for the year ended December 31, 2020 were recorded as change in fair value of warrant liabilities in the consolidated statement of operations. As of December 31, 2020, these warrants were fully exercised. Auctus Warrant On April 1, 2020, the Company issued 142,118 common stock warrants in connection with a $1.1 million convertible note. The warrant was recorded as a warrant liability utilizing the Black-Scholes pricing model. The warrant liability was recorded at the date of grant at fair value. Subsequent changes in fair value for the year ended December 31, 2020 were recorded as change in fair value of warrant liability in the consolidated statement of operations. On September 29, 2020, the Company entered into an amendment related to the common stock warrants and issued an additional 217,357 warrants. As of December 31, 2020, these warrants were fully exercised. Subsidiary Warrant Liability The Company assumed liability for a warrant issued by PEC that expires on January 28, 2023. The fair value of the warrant liability, totaled $25,000 on December 31, 2020 and $24,000 on December 31, 2019, resulting in a change in fair value of $1,000 that is reported as a component of other income/(expense) in the consolidated statement of operations for the year ended December 31, 2020.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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