Convertible Promissory Note

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Convertible Promissory Note

Convertible Promissory Note

During the first quarter of 2021, we invested $5 million in a convertible promissory note ("the note") of a privately held clinical-stage biotechnology company (the "issuer"). The note bears an 8% annual interest rate and has an 18-month term. The issuer is not required to make any principal or interest payments until the end of the term. The note, along with any accrued interest, may automatically convert into equity securities of the issuer under either a financing event or a change in control event as defined in the convertible promissory note agreement. The issuer's product development efforts could encounter technical or other difficulties that could increase their development costs more than expected. The issuer will likely require additional capital prior to obtaining certain regulatory approval or to be able to repay the convertible promissory note with accrued interest at the end of the term.

The following table summarizes the activity during the three months ended June 30, 2022;

	March 31, 2022		Fair Value Adjustments to the note		Accretion of Discount		Estimated Credit Loss		Interest Income		Fair Value Adjustment to Embedded Derivative		June 30, 2022
Fair value of the note	$	5,418	$	92	$	—	$	—	$	—	$	—	$	5,510
Discount on the note	(82)		—		46		—		—		—		(36)
Estimated Credit Loss	(794)		—		—		(26)		—		—		(820)
Convertible Promissory Note, net	$	4,542	$	92	$	46	$	(26)	$	—	$	—	$	4,654
Embedded Derivative	$	1,003	$	—	$	—	$	—	$	—	$	23	$	1,026
Interest Receivable	$	429	$	—	$	—	$	—	$	101	$	—	$	530
Total in Other Current Assets	$	5,974	$	92	$	46	$	(26)	$	101	$	23	$	6,210

The following table summarizes the amounts recorded and activity during the six months ended June 30, 2022;

	December 31, 2021		Fair Value Adjustments to the note		Accretion of Discount		Estimated Credit Loss		Interest Income		Fair Value Adjustment to Embedded Derivative		June 30, 2022
Fair value of the note	$	4,906	$	604	$	—	$	—	$	—	$	—	$	5,510
Discount on the note	(127)		—		91		—		—		—		(36)
Estimated Credit Loss	(758)		—		—		(62)		—		—		(820)
Convertible Promissory Note, net	$	4,021	$	604	$	91	$	(62)	$	—	$	—	$	4,654
Embedded Derivative	$	962	$	—	$	—	$	—	$	—	$	64	$	1,026
Interest Receivable	$	329	$	—	$	—	$	—	$	201	$	—	$	530
Total in Other Current Assets	$	5,312	$	604	$	91	$	(62)	$	201	$	64	$	6,210