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Investments and Fair Value Instruments | 9 Months Ended
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Sep. 30, 2022
Investments And Fair Value Instruments [Abstract] |
Investments and Fair Value Instruments | 5. Investments and Fair Value Instruments Investments The investments are carried at fair value, based on quoted market prices or other readily available market information. Unrealized and realized gains and losses are recognized as other income in the condensed consolidated statements of operations and comprehensive loss. The following tables summarize the amortized cost and fair value of the investment securities portfolio at September 30, 2022 and December 31, 2021.
(Dollars in thousands) |  | Amortized Cost |  |  | Unrealized Gains |  |  | Unrealized Losses |  |  | Estimated Fair Value |
September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 20,477 |  |  | $ | — |  |  | $ | — |  |  | $ | 20,477 |
Total Assets at Fair Value |  | $ | 20,477 |  |  | $ | — |  |  | $ | — |  |  | $ | 20,477 |
(Dollars in thousands) |  | Amortized Cost |  |  | Unrealized Gains |  |  | Unrealized Losses |  |  | Estimated Fair Value |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 26,842 |  |  | $ | — |  |  | $ | — |  |  | $ | 26,842 |
Total Assets at Fair Value |  | $ | 26,842 |  |  | $ | — |  |  | $ | — |  |  | $ | 26,842 |
The Company did no t have any investment categories that were in a continuous unrealized loss position for more than twelve months as of September 30, 2022. Fair Value Measurement The fair value of the investment securities at September 30, 2022 were as follows:
|  | Fair Value Measurements at September 30, 2022 |
(Dollars in thousands) |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets at Fair Value |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 20,477 |  |  | $ | — |  |  | $ | — |  |  | $ | 20,477 |
Total Assets at Fair Value |  | $ | 20,477 |  |  | $ | — |  |  | $ | — |  |  | $ | 20,477 |
The fair value of the investment securities at December 31, 2021 were as follows:
|  | Fair Value Measurements at December 31, 2021 |
(Dollars in thousands) |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets at Fair Value |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 26,842 |  |  | $ | — |  |  | $ | — |  |  | $ | 26,842 |
Total Assets at Fair Value |  | $ | 26,842 |  |  | $ | — |  |  | $ | — |  |  | $ | 26,842 |
The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during 2022 or 2021. The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable and other receivables, accounts payable, accrued liabilities, and notes payable. For accounts receivable and other receivables, accounts payable, accrued liabilities, and notes payable the carrying amounts of these financial instruments as of September 30, 2022 and December 31, 2021 were considered representative of their fair values due to their short term to maturity or repayment. Cash equivalents are carried at cost, which approximates their fair value. The Company’s Level 3 liabilities consist of a contingent liability resulting from the Anawah, Inc. ("Anawah") acquisition as described in Note 15, as well as preferred investment options related to the August 2022 Registered Direct Offering described in Note 11. As of December 31, 2021, the Company also had common stock warrant liabilities related to the March 2018, the June 2019, the September 2019, and the January 2021 Offerings, described in Note 11, which were reclassified to additional paid-in capital upon adoption of ASU 2020-06, as of January 1, 2022. See Note 2 for details of the adoption of ASU 2020-06. The contingent liability related to the Anawah acquisition was measured and recorded on a recurring basis as of September 30, 2022 and December 31, 2021, using unobservable inputs, namely the Company’s ability and intent to pursue certain specific products developed using technology acquired in the purchase. A significant deviation in the Company’s ability and/or intent to pursue the technology acquired in the purchase could result in a significantly lower (higher) fair value measurement. The preferred investment option liabilities were measured and recorded on a recurring basis using the Black-Scholes Model with the following assumptions at September 30, 2022:
|  | August 2022 Options |  | August 2022 Placement Agent Options |
Remaining term (in years) |  |  | 4.92 |  |  | 4.92 |
Expected volatility |  |  | 128.5 | % |  | 128.5 | %
Risk-free interest rate |  |  | 4.1 | % |  | 4.1 | %
Expected dividend yield |  |  | 0 | % |  | 0 | %
The significant input used in the fair value measurement of the Company’s Level 3 options liabilities is volatility. A significant increase (decrease) in volatility could result in a significantly higher (lower) fair value measurement. The following table sets forth the establishment of the Company’s Level 3 liabilities, as well as a summary of the changes in the fair value and other adjustments (in thousands):
(Dollars in thousands) |  | Common Stock Warrant Liability - March 2018 Purchase Agreement |  |  | Common Stock Warrant Liability - June 2019 Offering |  |  | Common Stock Warrant Liability - September 2019 Offering |  |  | Common Stock Warrant Liability - January 2021 Offering |  |  | August 2022 Options |  |  | August 2022 Placement Agent Options |  |  | Contingent Liabilities |  |  | Total |
Balance as of December 31, 2021 |  | $ | 7 |  |  | $ | 170 |  |  | $ | 223 |  |  | $ | 2,993 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,070 |  |  | $ | 5,463 |
Reclassification upon adoption of ASU 2020-06 |  |  | (7 | ) |  |  | (170 | ) |  |  | (223 | ) |  |  | (2,993 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,392 | )
Initial recognition |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,824 |  |  |  | 191 |  |  |  | — |  |  |  | 4,015 |
Change in fair value and other adjustments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,791 | ) |  |  | (89 | ) |  |  | (70 | ) |  |  | (1,950 | )
Balance as of September 30, 2022 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,033 |  |  | $ | 102 |  |  | $ | 2,000 |  |  | $ | 4,135 |
The Company recorded aggregate impairment charges of $442,000 and $1.4 million during the nine months ended September 30, 2022 and 2021, respectively, related to intangible assets and other long-lived assets. The Company has classified the fair value measurements as a Level 3 measurement in the fair value hierarchy because they involve significant unobservable inputs such as cash flow projections, discount rates and management assumptions. Assets classified as held for sale are recorded at fair value as of September 30, 2022. The Company has classified the fair value measurements as a Level 3 measurement in the fair value hierarchy as the fair value has been estimated using publicly available prices for some of the assets, and business partners' estimates for assets with prices not readily available, due to the relatively small size of the industry in which they can be used.

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