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Investments and Fair Value Instruments | 6 Months Ended
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Jun. 30, 2023
Investments And Fair Value Instruments [Abstract] |
Investments and Fair Value Instruments | 5. Investments and Fair Value Instruments Available-for-Sale Investments The Company classified short-term investments as “available-for-sale.” These short-term investments are free of trading restrictions. The investments are carried at fair value, based on quoted market prices or other readily available market information. Unrealized gains and losses are included in accumulated other comprehensive income (loss), which is reflected as a separate component of stockholder’s equity in the condensed consolidated balance sheets. Gains and losses are recognized when realized in the condensed consolidated statements of operations and comprehensive income (loss). The following tables summarize the amortized cost and fair value of the investment securities portfolio at June 30, 2023 and December 31, 2022 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income:
(Dollars in thousands) |  | Amortized Cost |  |  | Unrealized Gains |  |  | Unrealized Losses |  |  | Estimated Fair Value |
June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 11,353 |  |  | $ | — |  |  | $ | — |  |  | $ | 11,353 |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |
Treasury bills |  |  | 5,002 |  |  |  | 21 |  |  |  | — |  |  |  | 5,023 |
Total Assets at Fair Value |  | $ | 16,355 |  |  | $ | 21 |  |  | $ | — |  |  | $ | 16,376 |
(Dollars in thousands) |  | Amortized Cost |  |  | Unrealized Gains |  |  | Unrealized Losses |  |  | Estimated Fair Value |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 18,620 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,620 |
Total Assets at Fair Value |  | $ | 18,620 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,620 |
The Company did no t have any investment categories that were in a continuous unrealized loss position for more than twelve months as of June 30, 2023. Fair Value Measurement The fair value of the investment securities at June 30, 2023 were as follows:
|  | Fair Value Measurements at June 30, 2023 |
(Dollars in thousands) |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets at Fair Value |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 11,353 |  |  | $ | — |  |  | $ | — |  |  | $ | 11,353 |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |
Treasury bills |  |  | 5,023 |  |  |  | — |  |  |  | — |  |  |  | 5,023 |
Total Assets at Fair Value |  | $ | 16,376 |  |  | $ | — |  |  | $ | — |  |  | $ | 16,376 |
The fair value of the investment securities at December 31, 2022 were as follows:
|  | Fair Value Measurements at December 31, 2022 |
(Dollars in thousands) |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets at Fair Value |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 18,620 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,620 |
Total Assets at Fair Value |  | $ | 18,620 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,620 |
The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during 2023 or 2022. The Company’s financial instruments consist primarily of cash and cash equivalents, short-term investments, accounts receivable and other receivables, accounts payable and accrued liabilities. For short-term investments, accounts receivable and other receivables, accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of June 30, 2023 and December 31, 2022 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 13, as well as preferred investment options related to the March 2023 Private Placement and August 2022 Registered Direct offerings described in Note 9. The contingent liability related to the Anawah acquisition was measured and recorded on a recurring basis as of June 30, 2023 and December 31, 2022, 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 as of June 30, 2023 and December 31, 2022:
|  | March 2023 Options - Series A & March 2023 Placement Agent Options |  |  | March 2023 Options - Series B |  |  | August 2022 Options & August 2022 Placement Agent Options |
|  | June 30, 2023 |  |  | December 31, 2022 |  |  | June 30, 2023 |  |  | December 31, 2022 |  |  | June 30, 2023 |  |  | December 31, 2022 |
Remaining term (in years) |  |  | 4.67 |  |  |  | — |  |  |  | 1.12 |  |  |  | — |  |  |  | 4.17 |  |  |  | 4.67 |
Expected volatility |  |  | 107.0 | % |  |  | — |  |  |  | 85.1 | % |  |  | — |  |  |  | 107.6 | % |  |  | 106.2 | %
Risk-free interest rate |  |  | 4.2 | % |  |  | — |  |  |  | 5.3 | % |  |  | — |  |  |  | 4.3 | % |  |  | 4.0 | %
Expected dividend yield |  |  | 0 | % |  |  | — |  |  |  | 0 | % |  |  | — |  |  |  | 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) |  | March 2023 Options - Series A |  |  | March 2023 Options - Series B |  |  | March 2023 Placement Agent Options |  |  | August 2022 Options |  |  | August 2022 Placement Agent Options |  |  | Contingent Liabilities |  |  | Total |
Balance as of December 31, 2022 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 767 |  |  | $ | 39 |  |  | $ | 2,000 |  |  | $ | 2,806 |
Initial recognition |  |  | 4,324 |  |  |  | 2,274 |  |  |  | 212 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,810 |
Change in fair value and other adjustments |  |  | (2,604 | ) |  |  | (1,929 | ) |  |  | (130 | ) |  |  | (478 | ) |  |  | (30 | ) |  |  | — |  |  |  | (5,171 | )
Balance as of June 30, 2023 |  | $ | 1,720 |  |  | $ | 345 |  |  | $ | 82 |  |  | $ | 289 |  |  | $ | 9 |  |  | $ | 2,000 |  |  | $ | 4,445 |
Assets classified as held for sale are recorded at fair value as of June 30, 2023. 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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- Definition Investments and fair value of instruments disclosure. + References No definition available. + Details
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