| Supplemental Financial Statement Information |
Supplemental Financial Statement InformationOther Income (Expense), NetComponents of other income (expense), net, are summarized as follows (in thousands):
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Year Ended December 31, |
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2022 |
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2021 |
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| Interest Expense (a) |
$ |
(2,329) |
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$ |
(20) |
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| Gain on Warrant Revaluation (b) |
557 |
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342 |
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| Loss on Foreign Exchange (c) |
(2,161) |
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(26) |
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| Loss on Marketable Securities Investments (d) |
(413) |
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(70) |
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| Gain (Loss) on Revaluation of Equity Investment in YFE (e) |
1,392 |
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(106) |
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| Interest Income (f) |
1,015 |
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559 |
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| Finance Lease Interest Expense (g) |
(116) |
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– |
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| Warrant Incentive Expense (h) |
– |
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(69,139) |
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| Gain on Contingent Consideration Revaluation (i) |
1,345 |
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5,846 |
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| Other |
6 |
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– |
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| Other Income (Expense) |
$ |
1,625
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$ |
(62,594) |
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(a) |
Interest expense during the year ended December 31, 2022 primarily consisted of $1.3 million of interest incurred on the margin loan collateralized by the marketable security investments and $0.9 million of interest incurred on production facilities loans and bank indebtedness assumed as part of the Wow Acquisition. |
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(b) |
The gain on warrant revaluation is related to the change in fair value of outstanding warrants that were determined to be derivative liabilities attached to previously issued and converted convertible notes. |
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(c) |
The loss on foreign currency exchange during the year ended December 31, 2022 primarily relates to the EURO strengthening against the USD compared to the year ended December 31, 2021. The remeasurement of the investment in YFE’s equity securities resulted in a foreign exchange loss of $1.4 million and the remeasurement of cash held in a German bank account resulted in a foreign exchange loss of $0.5 million. For the year ended December 31, 2021 the loss on foreign currency exchange is related to foreign currency denominated monetary transactions. |
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(d) |
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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(e) |
The fair value revaluation of the investment in YFE, accounted for using the fair value option, as of December 31, 2022, resulted in a $1.4 million gain. The gain is a result of the increase in YFE’s stock price as of December 31, 2022, as compared to December 31, 2021. |
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(f) |
Interest Income during the year ended December 31, 2022, primarily consisted of cash interest received of $2.0 million from the investments in marketable securities, net of premium amortization expense of $1.1 million. |
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(g) |
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, the Company did not have any finance leases. |
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(h) |
The Warrant Incentive Expense was related to the fair value of new warrants issued in 2021 to certain existing warrant holders in exchange for previously issued outstanding warrants. |
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(i) |
The gain on contingent consideration revaluation is related to the change in fair value of the liability recorded for the earn-out arrangement with the sellers of the ChizComm entity acquired during 2021. The favorable decrease in the liability was based on updated assumptions utilized to value the contingency as of each period presented. |
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