Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurement

v3.21.1
Fair Value Measurement
3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE MEASUREMENTS
Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1 — Quoted market prices in active markets for identical assets or liabilities.

Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities measured at fair value and fair value measurement level were as follows:
March 31, 2021 December 31, 2020
Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3
Assets
Investment in LMC $ 193,950,792  $ 193,950,792  $ —  $ —  $ 330,556,744  $ 330,556,744  $ —  $ — 
Total assets at fair value $ 193,950,792  $ 193,950,792  $ —  $ —  $ 330,556,744  $ 330,556,744  $ —  $ — 
Liabilities
Convertible notes $ 182,200,000  $ —  $ —  $ 182,200,000  $ 197,700,000  $ —  $ —  $ 197,700,000 
Total liabilities at fair value $ 182,200,000  $ —  $ —  $ 182,200,000  $ 197,700,000  $ —  $ —  $ 197,700,000 

Investment in LMC

The Company's investment in LMC is measured at fair value using Level 1 inputs because it is valued using a quoted price in an active market. The Company recognizes changes in fair value of the investment in Other Income (Loss) on the Condensed Consolidated Statements of Operations.

Convertible Notes

The Company's convertible notes are measured at fair value using Level 3 inputs on issuance and at each reporting date. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company’s estimates are not necessarily indicative of the amounts that the Company, or holders of the instruments, could realize in a current market exchange. Significant assumptions used in the fair value model include estimates of the redemption dates, credit spreads and the market price and volatility of the Company’s common stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values.

The Company recognizes changes in fair value of the convertible notes related to changes in credit risk, if any, in Other Comprehensive Income (Loss) and the remaining change in fair value in Interest (Income) Expense.