| Schedule of Other Expense, net |
Components of Other Expense, net, are summarized as follows (in thousands):
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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2024 |
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2023 |
| Interest Expense (a) |
$ |
(246) |
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$ |
(1,020) |
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$ |
(449) |
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$ |
(2,105) |
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| Warrant Incentive Expense (b) |
– |
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(12,664) |
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– |
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(12,664) |
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| Gain on Revaluation of Warrants (c) |
23 |
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6,063 |
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60 |
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6,202 |
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| Loss on Revaluation of Equity Investment in YFE (d) |
(881) |
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4,322 |
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(881) |
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3,427 |
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| Realized Loss on Marketable Securities Investments (e) |
(216) |
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(720) |
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(357) |
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(2,257) |
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| Gain (Loss) on Foreign Exchange (f) |
(330) |
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35 |
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(980) |
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355 |
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| Interest Income (g) |
42 |
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158 |
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95 |
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468 |
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| Finance Lease Interest Expense (h) |
(24) |
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(54) |
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(54) |
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(104) |
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| Other (i) |
370 |
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2 |
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534 |
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3 |
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Other Expense, net |
$ |
(1,016) |
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$ |
(2,858) |
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$ |
(1,583) |
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$ |
(4,570) |
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Three Months and Six Months Ended June 30, 2024
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(a) |
Interest Expense during the three and six months ended June 30, 2024 primarily consisted of $0.2 million and $0.1 million, respectively, primarily due to interest incurred on bank indebtedness. |
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(b) |
There was no warrant incentive expense in 2024. |
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(c) |
The Gain on Revaluation of Warrants during the three and six months ended June 30, 2024 is primarily related to the changes in fair value of the remaining outstanding warrant classified as a liability due to decreases in market price. |
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(d) |
As accounted for using the fair value option, the loss on the YFE investment revaluation during the three and six months ended June 30, 2024, excluding the impact of foreign currency recorded separately, is a result of a decrease in YFE’s stock price as of June 30, 2024. |
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(e) |
The Realized Loss on Marketable Securities Investments during the three and six months ended June 30, 2024 reflects the loss that will not be recovered from the investments due to selling securities prior to maturity. |
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(f) |
The Gain (Loss) on Foreign Exchange during the three and six months ended June 30, 2024 primarily related to the revaluation of the YFE investment, resulting in a loss of $0.2 million and $0.6 million, respectively due to the EURO fluctuation to USD as compared to the prior reporting period. The remaining balance is related to remeasurements of transactions made in foreign currencies that are outstanding as of the condensed consolidated balance sheet date. |
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(g) |
Interest Income during the three and six months ended June 30, 2024 primarily consisted of interest income, net of premium amortization expense, recorded for the investments in marketable securities. |
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(h) |
The Finance Lease Interest Expense during the three and six months ended June 30, 2024 represents the interest portion of the finance lease obligations for equipment purchased under an equipment lease line. |
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(i) |
Other during the three and six months ended June 30, 2024 is primarily related to late fees from select clients on a payment plan. |
Three Months and Six Months Ended June 30, 2023
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(a) |
Interest expense during the three and six months ended June 30, 2023 primarily consisted of $0.6 million and $1.3 million of interest incurred on the margin loan, respectively, and $0.4 million and $0.8 million, respectively, of interest incurred on production facilities loans and bank indebtedness assumed as part of the Wow Acquisition.
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(b) |
The Warrant Incentive Expense is related to the $12.7 million fair value of Exchange Warrants that were issued during the three months ended June 30, 2023 to certain existing warrant holders in exchange for previously issued outstanding warrants and $3.5 million recorded as the incremental expense of the 2021 Warrants immediately before and after the repricing. |
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(c) |
The gain on warrant revaluation during the three and six months ended June 30, 2023 is primarily related to the $6.0 million change in fair value as of the end of the reporting period of the Exchange and SEG Warrants compared to the fair value at issuance date. |
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(d) |
As accounted for using the fair value option, the gain on the YFE investment revaluation during the three and six months ended June 30, 2023, excluding the impact of foreign currency recorded separately, is a result of an increase in YFE’s stock price as of June 30, 2023. |
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(e) |
The net realized loss on marketable securities reflects the loss that will not be recovered from the investments due to selling securities and issuers' prepayments of principals on certain mortgage-backed securities. |
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(f) |
The gain on foreign currency exchange during the three and six months ended June 30, 2023 primarily related to the EURO weakening against the USD compared to the three and six months ended prior period. |
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(g) |
Interest Income during the three and six months ended June 30, 2023 primarily consisted of cash interest received of $0.3 million and $0.7 million from the investments in marketable securities, respectively, net of premium amortization expense of $0.2 million and $0.3 million, respectively. |
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(h) |
The finance lease interest expense represents the interest portion of the finance lease obligations assumed as part of the Wow Acquisition for equipment purchased under an equipment lease line. Prior to the acquisition of Wow, finance leases did not exist. |
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(i) |
Other during the three and six months ended June 30, 2023 is primarily related to late fees from select clients on a payment plan. |
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