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FAIR VALUE OF FINANCIAL INSTRUMENTS
 3 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE OF FINANCIAL INSTRUMENTS

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy:

                    
   Fair Value Measurement at March 31, 2023 
   Total   Level 1   Level 2   Level 3 
Assets:                
Investment in common stock of Alzamend Neuro, Inc. (“Alzamend”) – a related party  $4,856,000   $4,856,000   $-   $- 
Investments in marketable equity securities   1,367,000    1,367,000    -    - 
Cash and marketable securities held in trust account   119,254,000    119,254,000    -    - 
Total assets measured at fair value  $125,477,000   $125,477,000   $-   $- 
                     
Liabilities:                    
Series E, F and G preferred stock liabilities  $8,500,000   $-   $-   $8,500,000 
Convertible promissory notes   15,283,000    -    -    15,283,000 
Total liabilities measured at fair value  $23,783,000   $-   $-   $23,783,000 

 

   Fair Value Measurement at December 31, 2022 
    Total    Level 1    Level 2    Level 3 
Assets:                    
Investment in common stock of Alzamend – a related party  $6,449,000   $6,449,000   $-   $- 
Investments in marketable equity securities   6,590,000    6,590,000    -    - 
Cash and marketable securities held in trust account   118,193,000    118,193,000    -    - 
Investments in other equity securities   13,340,000    -    -    13,340,000 
Total assets measured at fair value  $144,572,000   $131,232,000   $-   $13,340,000 
                     
Liabilities:                    
Convertible promissory notes  $12,776,000   $-   $-   $12,776,000 

 

The Company assesses the inputs used to measure fair value using the three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks.

 

 The following table summarizes the changes in investments in other equity securities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) for the three months ended March 31, 2023:

     
   Investments in
other equity
securities
 Balance at January 1, 2023  $ 13,340,000
 Conversion to Level 1 marketable securities    (13,340,000)
 Balance at March 31, 2023  $ -

 

Equity Investments for Which Measurement Alternative Has Been Selected

 

As of March 31, 2023 and December 31, 2022, the Company held equity investments in other securities, consisting of investments in preferred stock, valued at $23.7 million and $29.2 million, respectively, that were valued using a measurement alternative. These investments are included in other equity securities in the accompanying condensed consolidated balance sheets.