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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2023

Factors used in determining the fair value of our financial assets and liabilities are summarized into three broad categories:

•Level 1 - quoted prices in active markets for identical securities;

•Level 2 - other significant observable inputs, including quoted prices for similar securities, interest rates, prepayment spreads, credit risk; and

•Level 3 - significant unobservable inputs, including our own assumptions in determining fair value.

We determined the carrying value of Cash, Receivables, Accounts payable and Accrued expenses and other current liabilities approximate their fair values due to the short-term nature of their terms.

There were no changes to our valuation techniques during the quarter ended June 30, 2023.

Asset Impairment

See Note 7 - Asset Impairment for discussion of an asset impairment charge recorded in the quarter ended March 31, 2023. There were no impairment charges for the quarter ended June 30, 2023.

PIPE Warrants

All of our remaining PIPE warrants were exercised or expired in the first quarter of 2023.

Our PIPE warrants were recorded at fair value at the end of each reporting period and transaction date with changes in fair value recorded on our Condensed Consolidated Statements of Operations.

The public PIPE warrants traded in active markets with sufficient trading volume to qualify as Level 1 financial instruments as they had observable market prices which were used to estimate the fair value.

The private placement PIPE warrants were not traded in active markets, or were traded with insufficient volume and therefore represented Level 3 financial instruments that are valued using a Black-Scholes option-pricing model.

The fair value of the PIPE warrant liability was as follows:


	December 31, 2022
		Carrying Amount		Level 1		Level 2		Level 3

PIPE Warrants		$	742	$	742	$	—	$	—
Private Warrants		164		—		—		164
Total		$	906	$	742	$	—	$	164

Level 3 Disclosures

Changes in the Level 3 PIPE warrant liability were as follows:


	Six months ended June 30, 2023

Balance at December 31, 2022	$	164

Measurement adjustment	(164)
Balance at June 30, 2023	$	-

- 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.

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