| Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 31, 2022 |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include those of the company and its subsidiaries, Cerevel Therapeutics, Inc., Cerevel Therapeutics, LLC and Cerevel MA Securities Corp., after elimination of all intercompany accounts and transactions. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). As a result of the Business Combination Transaction, the shares and corresponding capital amounts and loss per share related to Old Cerevel’s outstanding redeemable convertible preferred stock, redeemable convertible common stock and common stock prior to October 27, 2020, have been retroactively restated to give effect to the Exchange Ratio established in the Business Combination Agreement. For additional information on the Business Combination Transaction and the Exchange Ratio, please read Note 3 , Business Combination , to these consolidated financial statements. |
| Segment Information | Segment Information Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources to an individual segment and in assessing performance. Our CODM is our Chairperson of the Board of Directors and Chief Executive Officer. We have determined that we operate as a single operating segment and have one reportable segment. All of our long-lived assets are held in the United States. |
| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the fair value of our financing liabilities, the fair value of stock options, the accrual for research and development expense and the recoverability of our net deferred tax assets and the related valuation allowance. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances change. Actual results could differ materially from those estimates. |
| Cash and Cash Equivalents | Cash and Cash Equivalents We consider all short-term, highly liquid investments that mature within 90 days or less from the date of purchase to be cash equivalents. As of December 31, 2022, our cash equivalents consisted of amounts invested in money market funds. As of December 31, 2021 , our cash equivalents consisted of amounts invested in money market funds, commercial paper and other debt securities with maturities of 90 days or less from the original date of purchase. |
| Restricted Cash | Restricted Cash In connection with our entering into the lease agreement for our headquarters in Cambridge, MA, in July 2019 we were required to provide a security deposit in the form of a letter of credit. We have classified this amount as restricted cash in our consolidated balance sheets as of December 31, 2022 and 2021. Restricted cash was classified as a non-current asset as the associated lease term expires more than 12 months from December 31, 2022. A reconciliation of the cash, cash equivalents and restricted cash reported in our consolidated balance sheets that sum to the total of the amounts shown in the consolidated statements of cash flows is as follows:
As of December 31,
(In thousands) 2022 2021
Cash and cash equivalents $ 136,521 $ 193,018
Restricted cash 1,867 4,200
Total cash, cash equivalents and restricted cash $ 138,388 $ 197,218 |
| Marketable Securities | Marketable Securities We classify investments with original contractual maturities greater than 90 days at the date of purchase as marketable securities. Marketable securities with a remaining maturity date greater than one year are classified as non-current assets. Marketable Debt Securities Our investments in marketable debt securities are classified and accounted for as available-for-sale. Available-for-sale marketable debt securities are recorded at fair market value with unrealized gains and losses recognized in other comprehensive income (loss) unless the security has experienced a credit loss, or has experienced an unrealized loss and we have determined that we have the intent to sell the security or it is more likely than not that we will have to sell the security before its expected recovery. Realized gains and losses are reported in other income (expense), net, based on the specific identification method. Available-for-sale marketable securities are also adjusted for amortization of premiums and accretion of discounts to maturity, with such amortization and accretion included within interest income (expense), net. Accrued interest receivable related to our available-for-sale marketable securities is presented within prepaid expenses and other current assets on our consolidated balance sheets. Credit Losses When the fair value of an available-for-sale debt security falls below the amortized cost basis it is evaluated to determine if any of the decline in value is attributable to a credit loss. Decreases in fair value attributable to credit losses are recorded directly to earnings with a corresponding allowance for credit losses, limited to the amount that the fair value is less than the amortized cost basis. If the credit quality subsequently improves the allowance is reversed up to a maximum of the previously recorded credit losses. If we intend to sell an impaired available-for-sale debt security, or if it is more likely than not that we will be required to sell the security prior to recovering the amortized cost basis, the entire fair value adjustment will immediately be recognized in earnings with no corresponding allowance for credit losses. Factors considered in making these evaluations include quoted market prices, recent financial results and operating trends, credit quality of debt instrument issuers, expected cash flows from securities, other publicly available information that may affect the value of the marketable debt security, duration and severity of the decline in value, and our strategy and intentions for holding the marketable debt security. |
| Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities and restricted cash. All of these financial instruments are maintained at a large, creditworthy and accredited financial institutions. Our cash deposits at times may significantly exceed federally insured limits. We do not believe that we are subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. We invest our excess cash primarily in money market funds, U.S. treasury notes, and high quality, marketable debt instruments of corporations and government sponsored enterprises in accordance with our investment policy. Our investment policy defines allowable investments and establishes guidelines relating to credit quality, diversification, and maturities of our investments to preserve capital and maintain liquidity. We do not have any significant off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. |
| Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization, subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Purchased assets that are not yet in service are recorded to construction-in-process and no depreciation expense is recorded. Once the assets are placed in service, they are reclassified to the appropriate asset class. Depreciation and amortization expense is recognized using the straight-line method over the following estimated useful lives:
Asset Category Estimated
Computer equipment and software 3 years
Furniture and fixtures 5 years
Laboratory equipment 5 years
Leasehold improvements Shorter of useful life or remaining lease term Costs of major additions and improvements are capitalized and amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the asset. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in the determination of net income or loss. The cost of normal, recurring, or periodic repairs and maintenance activities are expensed as incurred. |
| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Our long-lived assets to be held and used, such as property and equipment and other long-term assets, are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that we consider in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, we compare forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows. To date, we have not recorded any impairment losses on long-lived assets. |
| Leases | Leases At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized in our consolidated balance sheets as operating lease assets, operating lease liabilities, current portion and operating lease liabilities, net of current portion. We have elected not to recognize leases with terms of one year or less on our consolidated balance sheets. We have also elected to account for the lease and non-lease components as a combined lease component for real estate leases. For non-real estate leases, the lease component and non-lease component will be accounted for as separate components, with the contract consideration being allocated based on the fair values of the components. Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, we include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We use the implicit rate when readily determinable and use our incremental borrowing rate when the implicit rate is not readily determinable based upon the information available at the commencement date of the respective leases in determining the present value of the lease payments. Our incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease in a similar economic environment. The lease payments used to determine our operating lease assets may include lease incentives, stated rent increases and escalation clauses linked to rates of inflation when determinable and are recognized in our operating lease assets in our consolidated balance sheets. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term and included in operating expenses in our consolidated statements of operations and comprehensive loss. |
| Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We have certain financial assets and liabilities recorded at fair value that have been classified and disclosed within one of the following three categories of the fair value hierarchy as described in the accounting standards for fair value measurements: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies, and similar techniques. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value may require significant judgment and involve uncertainty. Changes in our fair value measurements could have a significant impact on our results of operations in any given period. |
| Fair Value of Equity Commitment and Share Purchase Option | Fair Value of Equity Commitment and Share Purchase Option The Equity Commitment and Share Purchase Option were free-standing financial instruments that may have required us to transfer equity upon settlement or exercise, respectively, and were recorded at fair value on the Formation Transaction Date. The fair value of each financial instrument on the Formation Transaction Date was allocated to the Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A Common Stock. We revalued these financial instruments each reporting period through their termination upon closing of the Business Combination Transaction. Immediately prior to the closing of the Business Combination Transaction, these financial instruments were adjusted to their final fair value of zero. Changes in fair value of the Equity Commitment and Share Purchase Option were recognized as a component of other income (expense), net in our consolidated statements of operations and comprehensive loss. We classified the fair value of the remaining Equity Commitment and the Share Purchase Option as an asset or a liability in our consolidated balance sheets. Changes in the fair value of these instruments resulted from changes to one or multiple inputs, including adjustments to the discount rates, expected volatility and dividend yield as well as changes in the amount and timing of the anticipated future funding required in settlement of the Equity Commitment and upon exercise of the Share Purchase Option and the fair value of our preferred and common shares expected to be exchanged for that additional funding. For additional information on the Business Combination Transaction, please read Note 3 , Business Combination , to these consolidated financial statements. For additional information on the Equity Commitment and Share Purchase Option, please read Note 7 , Equity Commitment and Share Purchase Option , to these consolidated financial statements. |
| Fair Value Option for Funding Agreements | Fair Value Option for Funding Agreements We elected to account for our funding agreements and related financial liabilities described in Note 8 , Financing Liabilities , in accordance with the fair value option permitted under ASC 825-10, Financial Instruments . A liability associated with each of our funding agreements was initially recognized at their estimated fair value in our consolidated balance sheets. We revalue our financing liabilities on a recurring basis each reporting period with subsequent changes in fair value, excluding the impact of the change in fair value attributable to instrument-specific credit risk, separately presented as a component of other income (expense), net in our consolidated statements of operations and comprehensive loss. The portion of the fair value adjustment attributed to a change in the instrument-specific credit risk is recognized and separately presented as a component of other comprehensive income (loss). Changes in fair value attributable to instrument-specific credit risk are derived by benchmarking against the prior period credit spread to isolate the impact directly associated with the change in the credit spread utilized between periods. Changes in the fair value remeasurement of our financing liabilities can result from changes in one or multiple inputs, including changes to discount rates, changes in the expected achievement or timing of any sales-based, development or regulatory milestones, changes in the amount or timing of expected net cash flows, changes in the probability or timing of certain clinical events and changes in the assumed probability or timing associated with regulatory approval. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. The decision to elect the fair value option is determined on an instrument-by-instrument basis, and must be applied to an entire instrument and is irrevocable once elected, but need not be applied to all similar instruments. Assets and liabilities measured at fair value pursuant to ASC 825-10 are required to be reported separately from those instruments measured using another accounting method. Upfront, direct costs and fees related to the instruments for which we have elected the fair value option are recognized in general and administrative expense in earnings as incurred. For additional information on our qualifying instruments that we have elected to account for under the fair value option, please read Note 8 , Financing Liabilities , and Note 10 , Fair Value Measurements, to these consolidated financial statements. |
| Offering Costs | Offering Costs We capitalize certain underwriting, legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ (deficit) equity as a reduction of additional paid-in capital generated as a result of the offering. Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in our consolidated statements of operations and comprehensive loss. Costs directly associated with debt financings are amortized to interest expense using the effective interest method over the expected life of the related debt. Such debt issuance costs are presented on the consolidated balance sheets as a direct deduction from the related debt. We have capitalized deferred costs directly associated with our shelf registration statement on Form S-3 filed in November 2022. We will reclassify such costs to additional paid-in capital on a pro-rata basis as we complete offerings under the shelf registration statement, with any remaining deferred costs charged to general and administration expense at the end of the life of the shelf registration. We had previously capitalized deferred costs directly associated with our shelf registration statement on Form S-3 filed in November 2021, reclassifying $ 0.2 million of costs to additional paid-in capital as a result of an offering under the shelf registration statement in August 2022, and charged the remaining $ 0.3 million of costs to general and administration expense in November 2022 upon the filing of the Form S-3 filed in November 2022. |
| Revenues | Revenues Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has passed, the price is fixed or determinable, and collectability is reasonably assured. We are a clinical stage company and have had no revenues to date. |
| Research and Development Expense | Research and Development Expense Research and development expenses include costs incurred in connection with the preclinical and clinical development of our product candidates including employee-related expenses, consisting of salaries, benefits and equity-based compensation for personnel engaged in our research and development activities, fees paid to other entities that conduct certain research and development activities on our behalf, as well as certain indirect costs incurred in support of overall research and development activities including facilities, depreciation and technology expenses. Payments we make for research and development services prior to the services being rendered are recorded as prepaid assets in our consolidated balance sheets and are expensed as the services are provided. We estimate and accrue the value of goods and services received from CROs and other third parties each reporting period based on estimates of the level of services performed and progress in the period when we have not received an invoice from such organizations. When evaluating the adequacy of the accrued liabilities, we analyze progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the balances to be accrued at the end of any reporting period. We reassess and adjust our accruals as actual costs become known or as additional information becomes available. Our historical accrual estimates have not been materially different from the actual costs. |
| Government Grants for Research and Development | Government Grants for Research and Development We account for funds we receive from government grants based on specific facts and circumstances that best reflect the nature of the grant terms and conditions. To date, we have elected to account for funds received from government grants that are not in the form of an income tax credit, revenue from a contract with a customer or a loan, by analogy to International Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance. We recognize funds we receive from government grants for qualifying reimbursable research and development activities in our consolidated statements of operations and comprehensive loss as an offset to research and development expense in the period in which the qualifying reimbursable research and development expenses are incurred and there is reasonable assurance that we will comply with the conditions attached to the grant and receive the funds. Research and development expense for the years ended December 31, 2022 and 2021, wa s reduced by $ 4.4 million and $ 0.9 million, respectively, related to the reimbursement of certain research and development costs received from the National Institute of Drug Abuse agency of the National Institutes of Health. Additionally, we have recognized a receivable in prepaid expenses and other current assets of $ 1.4 million and $ 0.2 million as of December 31, 2022 and 2021 , respectively, for qualifying costs incurred but not yet reimbursed. |
| Concentration of Manufacturing Risk | Concentration of Manufacturing Risk We are dependent on third-party manufacturers to supply products for research and development activities in our programs. In particular, we rely and expect to continue to rely on a small number of manufacturers to supply our requirements for the active pharmaceutical ingredients and formulated drugs related to these programs. These programs could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and formulated drugs . |
| Patent Costs | Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are recorded as general and administrative expenses in our accompanying consolidated statements of operations and comprehensive loss. |
| Equity-Based Compensation | Equity-Based Compensation We determine the fair value of each employee and non-employee award issued under our equity-based compensation plan on the date of grant. The measurement date for non-employee awards is the date of grant without changes in the fair value of the award. We recognize compensation expense for service-based awards on a straight-line basis over the requisite service period which generally approximates the vesting term. For service-based awards with performance or market conditions that were satisfied upon closing of the Business Combination Transaction, we recognize compensation expense on a straight-line basis over the requisite service period for each separate vesting portion of the award, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. We account prospectively for forfeitures as they occur rather than apply an estimated forfeiture rate to equity-based compensation expense. We classify equity-based compensation expense in our consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified, as applicable. Determination of Fair Value – Preferred and Common Stock Prior to the completion of the Business Combination Transaction, given the absence of an active market for our common stock, we were required to estimate the fair value of the company’s common stock at the time of each grant of an equity-based award. We used a hybrid methodology that combined both an income approach and a market approach to estimate the business enterprise value and our total equity value to calculate the fair value of our preferred stock and common stock throughout 2020, until completion of the Business Combination Transaction. A probability-weighted discounted cash flow analysis was first prepared reflecting multiple scenarios for future outcomes associated with the acquired product candidates in order to estimate the cash flows associated with estimated liquidity events (i.e., an IPO). We also used a PWERM to determine the fair value of pre-IPO funding scenarios. We then used a market approach to estimate the value as of each potential date of liquidity, resulting in an estimate of the total equity value, including the value of planned future funding. The value of the preferred stock and common stock was then estimated using an option pricing method, allocating total equity value based on an assumed future liquidity date, the liquidation preference of the preferred stock and the assumed funding in each scenario. Each of these scenarios was probability-weighted based on the expected outcomes to arrive at a final estimated fair value per share of the common stock. The estimates and assumptions underlying our valuations included a number of objective and subjective factors. We believe our methodologies are reasonable based upon our internal peer company analyses and further supported by transactions involving our preferred stock. If different assumptions had been made, equity-based compensation expense, consolidated net loss and consolidated net loss per share could have been significantly different. Subsequent to the closing of the Business Combination Transaction, our board of directors determines the fair value of each share of common stock underlying stock-based awards based on the closing price of our common stock as reported by Nasdaq on the date of grant. Determination of Fair Value – Stock Option Awards Subsequent to the closing of the Business Combination Transaction, we estimate the fair value of our stock option awards using the Black Scholes method utilizing the fair value of our common stock and the following assumptions: • Expected term – We have opted to utilize the “simplified method,” for determining the expected life of the award, which is based on the mid-point between the vesting date and the end of the contractual term as all options granted after becoming a public entity are granted “at-the-money.” • Expected volatility – We determine the volatility for options granted based on an analysis of reported data for a peer group of companies and our own internal volatility. The expected volatility of granted options has been determined by considering a weighted-average of the historical and implied volatility measures of the peer group of companies and our own historical and implied volatility measures. We will continue to apply this method until a sufficient amount of information regarding the volatility of our own stock price becomes available. • Risk-free interest rate – The risk-free interest rate utilized in our calculations is based on a treasury instrument whose term is consistent with the expected life of the stock options. • Expected Dividend – The expected dividend yield is assumed to be zero as we have never paid dividends and do not have current plans to pay any dividends on our common stock. Prior to the closing of the Business Combination Transaction, we estimated the fair value of the stock option awards on the date of grant using the option pricing method, which is a variant of an income approach. The option pricing method was used given that a portion of the option awards have an exercise price that is considered to be “deeply out of the money.” The option pricing method incorporated the probability of the performance and market conditions being met and adjustments to the estimated life and value of the options to reflect the necessary growth in the common share value for such shares to become exercisable. Given that the common stock represented a non-marketable equity interest in a private enterprise, an adjustment was made to account for the lack of liquidity that a stockholder would experience. This adjustment is commonly referred to as a discount for lack of marketability. As there was no public market for our common stock prior to the closing of the Business Combination Transaction, we determined the volatility for options granted based on an analysis of reported data for a peer group of companies. The expected volatility of granted options were determined using a weighted-average of the historical volatility measures of this peer group of companies. The expected life of options for these awards were determined by probability-weighting the calculated expected life of the option at each month the option was eligible to be at- or in-the-money to estimate the overall adjusted expected life. We did not utilize the “simplified method” to determine expected life as this method is not valid for options that are “deeply out of the money.” The risk-free interest rate utilized in our calculations was based on a treasury instrument whose term is consistent with the expected life of the stock options. The expected dividend yield was assumed to be zero as we have never paid dividends and do not have current plans to pay any dividends on our common stock. For additional information on the assumptions used in determining the grant date fair value of equity-based awards granted, as well as a summary of the equity-based award activity under our equity-based compensation plans for the years ended December 31, 2022, 2021 and 2020, please read Note 14, Equity-Based Compensation , to these consolidated financial statements. |
| Common Stock Warrants and Derivative Financial Instruments | Com mon Stock Warrants and Derivative Financial Instruments We accounted for our common stock purchase warrants and other freestanding derivative financial instruments based on an assessment of the specific terms of the instrument and applicable authoritative guidance in accordance with ASC 480, Distinguishing Liabilities from Equity (ASC 480) , and reviewed our common stock purchase warrants and other freestanding derivative financial instruments at each balance sheet date to determine whether a change in classification was required. Our assessment considered whether the warrants were freestanding financial instruments pursuant to ASC 480, whether the warrants met the definition of a liability pursuant to ASC 480, and whether the warrants met all of the requirements for equity classification under ASC 815, including whether the warrants were indexed to our own common stock and whether the warrant holders could have potentially required “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which required the use of professional judgment, was conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants were outstanding. We classify freestanding derivative financial instruments that are indexed in our own stock as: a) Equity if they (i) require physical settlement or net-share settlement, or (ii) give the company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement), or b) Assets or liabilities if they (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the company’s control), or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement) Upon the consummation of the Business Combination Transaction, there were 4,983,314 public warrants and 166,333 private placement warrants (collectively, the warrants) outstanding. Each outstanding warrant of ARYA became one warrant to purchase one share of New Cerevel common stock. We determined that the 4,983,314 public warrants satisfied the criteria for classification as equity instruments at each reporting period through their exercise or redemption. In certain circumstances, the identity of the holder may result in different settlement amounts, and therefore the private placement warrants were not considered indexed in our own stock in the manner contemplated by ASC Section 815-40-15. Accordingly, we recognized the liability associated with the 166,333 private placement warrants within other long-term liabilities in our condensed consolidated balance sheet as of March 31, 2021, and revalued the liability on a recurring basis each reporting period through their cashless exercise and settlement in September 2021. We did no t recognize a liability in relation to the private placement warrants prior to March 31, 2021, as we previously determined that the fair value of these warrants was immaterial. No warrants remained outstanding as of December 31, 2022 and 2021. Changes in fair value of these warrants were recognized as an adjustment to other income (expense), net in our consolidated statements of operations and comprehensive loss. Changes in the fair value of the private placement warrants resulted from changes to one or multiple inputs, including adjustments to the discount rate, expected volatility and dividend yield as well as changes in the fair value of our common stock and public warrants. |
| Income Taxes | Income Taxes We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in our tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax basis of existing assets and liabilities and for loss and credit carryforwards using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax benefit (provision), net. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. We account for uncertain tax positions recognized in the consolidated financial statements by prescribing a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Income tax benefit (provision), net includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. |
| Comprehensive Loss | Comprehensive Loss Comprehensive loss is comprised of two components: net loss and other comprehensive income (loss), which includes other changes in stockholders’ deficit that result from transactions and economic events other than those with stockholders. For the years ended December 31, 2022 and 2021 , other comprehensive income (loss) consists of changes in fair value attributable to instrument-specific credit risk and net unrealized losses on our available-for-sale marketable securities. There were no items qualifying as other comprehensive income (loss) for the year ended December 31, 2020; accordingly, comprehensive loss equaled total net loss. |
| Net Loss Per Share | Net Loss per Share We calculate earnings per share in accordance with ASC 260, Earnings per Share . The two-class method of computing earnings per share is required for entities that have participating securities. Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the net loss of the company for cumulative preferred stock dividends. Diluted net loss per share is calculated by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period. For purposes of the dilutive net loss per share applicable to common stockholders calculation, warrants, common stock issuable upon conversion of convertible debt, stock options and unvested restricted stock are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share applicable to common stockholders, as their effect would be anti-dilutive due to the fact that we were in a net loss position for the periods presented; therefore, basic and diluted net loss per share applicable to common stockholders were the same for the period presented. |
| Recent Accounting Guidance | Recent Accounting Guidance From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed we do not believe that the impact of recently issued standards that are not yet effective will have a material impact on our consolidated financial statements or related disclosures. |
| Subsequent Event Considerations | Subsequent Event Considerations We consider events or transactions that occur after the balance sheet date but prior to the issuance of the consolidated financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. For additional information on our evaluation of subsequent events, please read Note 21, Subsequent Events, to these consolidated financial statements. |
