Other Assets

6 Months Ended

Jun. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

Investments in Convertible Debt

In January 2021, the Company purchased two convertible debt securities (the “January 2021 Notes”) for a total aggregate investment of $500 with maturity dates of January 1, 2023 and July 1, 2023, respectively. The January 2021 Notes receive interest at an annual rate of 6%. In February 2022, the Company purchased an additional convertible debt security (the “February 2022 Note”) in the amount of $2,000 that will mature on February 25, 2024 and receives interest at an annual rate of 6%. Interest accrues on each note and becomes payable upon conversion of each convertible note, or will be paid in connection with the repayment in full of the principal amount of such convertible notes.

In March 2023, the Company purchased a convertible debt security (the “March 2023 Note”) for a total aggregate investment of $323. The March 2023 Note receives interest at an annual rate of 9% and matures on March 31, 2025.

These convertible note investments are classified as available-for-sale securities. The January 2021 Notes and January 2022 Note are included in prepaid expenses and other current assets in the accompanying unaudited condensed consolidated balance sheets based on the maturity dates, and the March 2023 Note is included in other long-term assets. The Company accounts for these investments, along with the embedded derivatives associated with their conversion features, by utilizing the fair value option within ASC 825, Financial Instruments, and accounting for the entire hybrid instrument at fair value through other income, net. The Company recorded an increase in the fair value of the convertible notes of $246 and $380 for the three and six months ended June 30, 2023, respectively. The Company recorded an increase in the fair value of the convertible notes of $367 and $1,028 for the three and six months ended June 30, 2022, respectively.

With respect to its investments in these convertible debt securities, the Company has a variable interest in the issuers of these securities, which are variable interest entities. After evaluation of the relationship between the Company and these variable interest entities, the Company determined not to consolidate these variable interest entities’ results for the three and six months ended June 30, 2023 or 2022. Significant judgments included the determination that these variable interest entities lacked sufficient equity at risk to finance activities without additional subordinated support, and that the Company was not the primary beneficiary of the variable interest entities given the Company’s variable interests do not constitute a controlling financial interest.