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FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended
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Jun. 30, 2024
Fair Value Disclosures [Abstract] |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6. 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, assets measured on recurring basis |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Fair Value Measurement at June 30, 2024 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Investment in common stock of Alzamend Neuro, Inc. (“Alzamend”) – a related party |  | $ | 304,000 |  |  | $ | 304,000 |  |  | $ | - |  |  | $ | - |
Investments in marketable equity securities |  |  | 33,000 |  |  |  | 33,000 |  |  |  | - |  |  |  | - |
Cash and marketable securities held in trust account |  |  | 794,000 |  |  |  | 794,000 |  |  |  | - |  |  |  | - |
Digital assets |  |  | 224,000 |  |  |  | 224,000 |  |  |  | - |  |  |  | - |
Total assets measured at fair value |  | $ | 1,355,000 |  |  | $ | 1,355,000 |  |  | $ | - |  |  | $ | - |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant and embedded conversion feature liabilities |  | $ | 733,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 733,000 |
Convertible promissory notes |  |  | 18,980,000 |  |  |  | - |  |  |  | - |  |  |  | 18,980,000 |
Total liabilities measured at fair value |  | $ | 19,713,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 19,713,000 |
|  | Fair Value Measurement at December 31, 2023 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Investment in common stock of Alzamend |  | $ | 679,000 |  |  | $ | 679,000 |  |  | $ | - |  |  | $ | - |
Investments in marketable equity securities |  |  | 27,000 |  |  |  | 27,000 |  |  |  | - |  |  |  | - |
Cash and marketable securities held in trust account |  |  | 2,200,000 |  |  |  | 2,200,000 |  |  |  | - |  |  |  | - |
Total assets measured at fair value |  | $ | 2,906,000 |  |  | $ | 2,906,000 |  |  | $ | - |  |  | $ | - |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant and embedded conversion feature liabilities |  | $ | 1,742,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,742,000 |
Convertible promissory notes |  |  | 22,485,000 |  |  |  | - |  |  |  | - |  |  |  | 22,485,000 |
Total liabilities measured at fair value |  | $ | 24,227,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 24,227,000 |
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 changes in Level 3 fair value hierarchy during the three and six months ended June 30, 2024 and 2023 were as follows:
Schedule of changes in fair value hierarchy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Level 3 Balance at Beginning of Period |  |  | Fair Value Adjustments |  |  | Purchases, Sales and Settlements |  |  | Transfer in and/or out of Level 3 |  |  | Level 3 Balance at End of Period |
Six months ended June 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant and embedded conversion feature liabilities |  | $ | 1,742,000 |  |  | $ | (1,009,000 | ) |  | $ | - |  |  | $ | - |  |  | $ | 733,000 |
Convertible promissory notes |  |  | 22,485,000 |  |  |  | - |  |  |  | 770,000 |  |  |  | (4,275,000 | ) |  |  | 18,980,000 |
Six months ended June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant and embedded conversion feature liabilities |  | $ | 2,967,000 |  |  | $ | (3,222,000 | ) |  | $ | 5,860,000 |  |  | $ | - |  |  | $ | 5,605,000 |
Series E, F and G preferred stock liabilities |  |  | - |  |  |  | 91,000 |  |  |  | 8,500,000 |  |  |  | (328,000 | ) |  |  | 8,263,000 |
Convertible promissory notes |  |  | 10,571,000 |  |  |  | - |  |  |  | 8,832,000 |  |  |  | - |  |  |  | 19,403,000 |
|  |  | Level 3 Balance at Beginning of Period |  |  |  | Fair Value Adjustments |  |  |  | Purchases, Sales and Settlements |  |  |  | Transfer in and/or out of Level 3 |  |  |  | Level 3 Balance at End of Period |
Three months ended June 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant and embedded conversion feature liabilities |  | $ | 715,000 |  |  | $ | 18,000 |  |  | $ | - |  |  | $ | - |  |  | $ | 733,000 |
Convertible promissory notes |  |  | 21,180,000 |  |  |  | - |  |  |  | - |  |  |  | (2,200,000 | ) |  |  | 18,980,000 |
Three months ended June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant and embedded conversion feature liabilities |  | $ | 3,186,000 |  |  | $ | (1,911,000 | ) |  | $ | 4,330,000 |  |  | $ | - |  |  | $ | 5,605,000 |
Series E, F and G preferred stock liabilities |  |  | 8,500,000 |  |  |  | 91,000 |  |  |  | - |  |  |  | (328,000 | ) |  |  | 8,263,000 |
Convertible promissory notes |  |  | 12,776,000 |  |  |  | - |  |  |  | 6,627,000 |  |  |  | - |  |  |  | 19,403,000 |

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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/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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