Investments and Fair Value Instruments

3 Months Ended

Mar. 31, 2022

Investments And Fair Value Instruments [Abstract]

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 March 31, 2022 and December 31, 2021.


(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
March 31, 2022
Cash equivalents:
Money market funds		22,343		—		—		22,343
Total Assets at Fair Value	$	22,343	$	—	$	—	$	22,343


(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 not have any investment categories that were in a continuous unrealized loss position for more than twelve months as of March 31, 2022.

Fair Value Measurement

The fair value of the investment securities at March 31, 2022 were as follows:


	Fair Value Measurements at March 31, 2022
(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at Fair Value
Cash equivalents:
Money market funds		22,343		—		—		22,343
Total Assets at Fair Value	$	22,343	$	—	$	—	$	22,343

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, accounts payable, accrued liabilities, and notes payable. For accounts receivable, accounts payable, accrued liabilities, and notes payable the carrying amounts of these financial instruments as of March 31, 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.

As of March 31, 2022, the Company’s Level 3 liabilities consist of a contingent liability resulting from the Anawah acquisition, as described in Note 15, and a contingent liability resulting from the Industrial Seed Innovations acquisition. 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.

The contingent liability related to the Anawah acquisition was measured and recorded on a recurring basis as of March 31, 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 contingent liability related to the Industrial Seed Innovations (“ISI”) acquisition was measured and recorded on a recurring basis as of March 31, 2022 and December 31, 2021, using unobservable inputs, namely ISI’s forecasted revenue. A significant deviation in ISI’s forecasted revenue could result in a lower (higher) 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			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	)
Change in fair value of contingent consideration		—			—			—			—			(31	)	$	(31	)
Balance as of March 31, 2022	$	—		$	—		$	—		$	—		$	2,039		$	2,039