Quarterly report pursuant to Section 13 or 15(d)

Financial Instruments

v3.22.2.2
Financial Instruments
6 Months Ended
Jun. 30, 2022
Text Block [Abstract]  
Financial Instruments
Note 9 – Financial Instruments
Fair values have been determined for measurement and/or disclosure purposes based on the following methods. The Company characterizes inputs used in determining fair value using a hierarchy that prioritizes inputs depending on the degree to which they are observable. The levels of the fair value hierarchy are as follows:
 
   
Level 1 – fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
 
   
Level 2 – fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
 
   
Level 3 – fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The carrying values of cash, receivables, payables and accrued liabilities approximate their fair values because of the short-term nature of these financial instruments. Balances due to and due from related parties have no terms and are payable on demand, thus are also considered current and short-term in nature, hence carrying value approximates fair value.
The component of the Company’s long-term debt attributed to the host liability is recorded at amortized cost. Investments in debt instruments that are held to maturity are also recorded at amortized cost.
 
The following table summarizes the fair value hierarchy for the Company’s financial assets and financial liabilities that are
re-measured
at their fair values periodically:
 
    
June 30, 2022
    
December 31, 2021
 
    
Level 1
    
Level 2
    
Level 3
    
Total
    
Level 1
    
Level 2
    
Level 3
    
Total
 
Financial Assets
                                                                       
Long term investments - other
1
   $ 312      $ —        $ —        $ 312      $ 568      $ —        $ —        $ 568  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Financial Liabilities
                                                                       
Derivative liabilities
   $ —        $ —        $ —        $ —        $ —        $ —        $ 16      $ 16  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
 
(1)
Long-term investments – other are included in the investments balance on the unaudited interim condensed consolidated balance sheets.
There were no transfers between Level 1, Level 2, and Level 3 within the fair value hierarchy during the three and six months ended June 30, 2022 and 2021.
The Company’s other investment as of June 30, 2022 is considered to be a Level 1 instrument because it is comprised of shares of a public company, and there is an active market for the shares and observable market data and inputs available.
All Level 1 investments are comprised of equity investments which are
re-measured
at fair value using quoted market prices.
The following table summarizes the changes in Level 1 financial assets:
 
    
Financial Assets
 
Balance as of December 31, 2021
  
$
568
 
Revaluations on Level 1 instruments
     (256
    
 
 
 
Balance as of June 30, 2022
  
$
312
 
    
 
 
 
The derivative liabilities related to the convertible debt instruments and freestanding warrants are recorded at fair value estimated using the Black-Scholes option pricing model and is therefore considered to be a Level 3 measurement. On June 24, 2022 all warrants were forfeited upon the consummation of the Recapitalization Transaction.
The following table summarizes the changes in Level 3 financial assets and liabilities:
 
    
Derivative Liabilities
 
Balance as of December 31, 2021
  
$
16
 
Revaluations on Level 3 instruments
     (16
    
 
 
 
Balance as of June 30, 2022
  
$
—  
 
    
 
 
 
The Company’s financial and
non-financial
assets such as prepayments, other assets including equity accounted investments, property, plant and equipment, and intangibles, are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized.
The following table summarizes the Company’s long-term debt instruments (Note 5) at their carrying value and fair value:
 
    
June 30, 2022
    
December 31, 2021
 
    
Carrying Value
    
Fair Value
    
Carrying Value
    
Fair Value
 
June Unsecured Debentures
   $ 14,896      $ 14,888      $ 57,171      $ 64,596  
June Secured Debentures
     109,760        105,938        134,902        176,487  
Secured Notes
     13,135        12,971        —          —    
Other
     1,276        1,135        1,307        1,021  
    
 
 
    
 
 
    
 
 
    
 
 
 
Total
  
$
139,067
 
  
$
134,932
 
  
$
193,380
 
  
$
242,104