Arrive Investment

9 Months Ended

Sep. 30, 2023

Investments, All Other Investments [Abstract]

Arrive Investment

Note 6 — Arrive Investment

Arrive LLC (“Arrive”) is a company that was formed in partnership with Roc Nation with the intent of building a new platform and brand focused on early stage, high growth opportunities. Roc Nation is a full-service entertainment company, inclusive of artist and athlete management, label, publishing, touring, film/TV and new ventures. Arrive seeks to leverage these relationships to invest in proprietary opportunities and provide services including, but not limited to, marketing, promotion or strategic advice for its portfolio investments. The Company holds two separate Arrive investments described below.

● Investment in Arrive of $12.5 million and $12.8 million as of September 30, 2023 and December 31, 2022, respectively, represents an investment in the Arrive operating company, Arrive I LLC. The Company’s investment entitles the Company to appoint one of five Arrive Board members and gives the Company priority for distributions of current income and investment proceeds. In addition, the Company is entitled to receive between 18% and 20% of all general partner consideration on pooled investment vehicles managed by Arrive, whether characterized as management fees or incentive fees.

● Other assets of $0.6 million and $0.5 million as of September 30, 2023 and December 31, 2022, respectively, represent an investment in the Arrive Opportunities Fund I, LP, managed by an affiliate of Arrive I LLC.

The Company did not record any unrealized gains or losses during the three months ended September 30, 2023 or 2022 related to these investments. The Company took distributions of $0.3 million from the Arrive operating company, Arrive I LLC, in the form of marketable securities during the nine months ended September 30, 2023. The Company is not required to contribute additional capital to either of the investments.

Historically, the Company accounted for such investments under the cost method of accounting. The adoption of ASU No. 2016-01 in the first quarter of 2018 effectively eliminated the cost method of accounting, and the carrying value of this investment is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. Our strategic investment in equity securities does not have a readily determinable fair value; therefore, the new guidance was adopted prospectively. As of September 30, 2023, there were no indicators of impairment for this investment. The Company will assess the investment for potential impairment, quarterly.