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Investments and Fair Value Instruments
12 Months Ended
Dec. 31, 2021
Investments And Fair Value Instruments [Abstract]  
Investments and Fair Value Instruments

Note 6. 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 consolidated statements of operations and comprehensive loss.

The Company classified its investments in corporate securities of Bioceres Crop Solutions Corp. (“BIOX”) as short-term investments. The Company recorded realized gains of $10.2 million for the year ended December 31, 2021, associated with the sale of these corporate securities in other income, net, in the consolidated statements of operations and comprehensive loss.

The following tables summarize the amortized cost and fair value of the investment securities portfolio at December 30, 2021 and December 31, 2020.

 

(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

 

 

(Dollars in thousands)

 

Amortized
Cost

 

 

Unrealized
Gains

 

 

Unrealized
Losses

 

 

Estimated
Fair Value

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

12,082

 

 

$

 

 

$

 

 

$

12,082

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate securities

 

 

10,969

 

 

 

656

 

 

 

 

 

 

11,625

 

Total Assets at Fair Value

 

$

23,051

 

 

$

656

 

 

$

 

 

$

23,707

 

 

The Company did not have any investment categories that were in a continuous unrealized loss position for more than twelve months as of December 31, 2021.

Fair Value Measurement

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 fair value of the investment securities at December 31, 2020 were as follows:

 

 

 

Fair Value Measurements at December 31, 2020

 

(Dollars in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets at Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

12,082

 

 

$

 

 

$

 

 

$

12,082

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate securities

 

 

11,625

 

 

 

 

 

 

 

 

 

11,625

 

Total Assets at Fair Value

 

$

23,707

 

 

$

 

 

$

 

 

$

23,707

 

 

The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during 2021 or 2020. 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 December 31, 2021 and December 31, 2020 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.

The Company’s Level 3 liabilities consist of a contingent liability resulting from the Anawah acquisition, as described in Note 17, a contingent liability resulting from the Industrial Seed Innovations (“ISI”) acquisition, as described in Note 7 and 17, and common stock warrant liabilities related to the March 2018, the June 2019, the September 2019, and the January 2021 Offerings described in Note 15.

The contingent liability related to the Anawah acquisition was measured and recorded on a recurring basis as of December 31, 2021 and December 31, 2020, 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 ISI acquisition was measured and recorded on a recurring basis as of December 31, 2021 and December 31, 2020, using unobservable inputs, namely ISI’s forecasted revenue. A significant deviation in ISI’s forecasted revenue could result in a significantly lower (higher) fair value measurement.

The warrant liabilities were measured and recorded on a recurring basis using the Black-Scholes Model with the following assumptions at December 31, 2021 and 2020:

 

 

 

January 2021 Warrants

 

 

September 2019 Warrants

 

 

June 2019 Warrants

 

 

March 2018 Warrants

 

 

 

December 31,
2021

 

 

December 31,
2020

 

 

December 31,
2021

 

 

December 31,
2020

 

 

December 31,
2021

 

 

December 31,
2020

 

 

December 31,
2021

 

 

December 31,
2020

 

Expected term (in years)

 

 

4.58

 

 

 

 

 

 

3.20

 

 

 

4.20

 

 

 

2.96

 

 

 

3.96

 

 

 

1.22

 

 

 

2.22

 

Expected volatility

 

 

129.8

%

 

 

 

 

 

109.7

%

 

 

135.0

%

 

 

110.8

%

 

 

135.0

%

 

 

86.0

%

 

 

130.0

%

Risk-free interest rate

 

 

1.2

%

 

 

 

 

 

0.9

%

 

 

0.3

%

 

 

0.8

%

 

 

0.3

%

 

 

0.5

%

 

 

0.1

%

Expected dividend yield

 

 

0

%

 

 

 

 

 

0

%

 

 

0

%

 

 

0

%

 

 

0

%

 

 

0

%

 

 

0

%

 

The significant unobservable input used in the fair value measurement of the Company’s Level 3 warrant liabilities is volatility. A significant increase (decrease) in volatility could result in a significantly higher (lower) 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 2018
Offering

 

 

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, 2019

 

$

4,579

 

 

$

5,444

 

 

$

1,993

 

 

$

2,920

 

 

$

 

 

$

2,000

 

 

$

16,936

 

Change in fair value and
   other adjustments

 

 

(2,277

)

 

 

(1,426

)

 

 

(1,161

)

 

 

(1,706

)

 

 

 

 

 

 

 

$

(6,570

)

Exercise of warrants

 

 

(1,641

)

 

 

(4,018

)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(5,659

)

ISI acquisition contingent
   consideration

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

280

 

 

$

280

 

Balance as of December 31, 2020

 

$

661

 

 

$

 

 

$

832

 

 

$

1,214

 

 

$

 

 

$

2,280

 

 

$

4,987

 

Initial recognition

 

 

 

 

 

 

 

 

 

 

 

 

 

$

9,631

 

 

 

 

 

$

9,631

 

Change in fair value and
   other adjustments

 

 

(654

)

 

 

 

 

 

(662

)

 

 

(991

)

 

 

(6,638

)

 

 

(210

)

 

$

(9,155

)

Balance as of December 31, 2021

 

$

7

 

 

$

 

 

$

170

 

 

$

223

 

 

$

2,993

 

 

$

2,070

 

 

$

5,463