Quarterly report [Sections 13 or 15(d)]

Fair Value Measurements

v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Measurements  
Fair Value Measurements

3. Fair Value Measurements

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers all related factors of the asset by market participants in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

● Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
● Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
● Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Assets and liabilities measured at fair value on a recurring basis, including their levels in the fair value hierarchy are as follows:

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As of June 30, 2025

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Fair value hierarchy

Fair value of assets

    

Level 1

    

Level 2

    

Level 3

Cash and cash equivalents

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$

772

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$

—

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$

—

Restricted cash

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1,277

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—

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—

Total fair value of assets

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$

2,049

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$

—

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$

—

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As of December 31, 2024

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Fair value hierarchy

Fair value of assets

    

Level 1

    

Level 2

    

Level 3

Cash and cash equivalents

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$

1,643

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$

—

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$

—

Restricted cash

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1,276

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—

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—

Total

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$

2,919

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$

—

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$

—

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Fair value of liabilities

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Contingent interest feature derivative

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—

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—

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(1,700)

Total fair value of liabilities

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$

—

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$

—

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$

(1,700)

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Contingent Interest Feature Derivative

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The fair value is based on Level 3 inputs, which include the projected escalating incremental interest expense from the 2024 Standard Farms Loan. Upon the Location Opening Date on February 14, 2025, the contingent interest feature derivative balance was derecognized. The contingent interest feature derivative balance was $1,700 as of December 31, 2024. See Note 11 — Notes Payable for additional information.

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Financial Instruments

The carrying amount of the Company’s notes payable, which are recorded at amortized cost, approximates their fair values based upon market interest rates available to the Company for debt of similar risk and maturities, a Level 3 input. See Note 11 — Notes Payable for additional information. Additionally, the carrying amount of the Company’s loans receivable, net of expected credit losses, approximates their fair values. See Note 9 — Loans Receivable for additional information. There were no transfers between the levels of fair value hierarchy during each of the six months ended June 30, 2025 and 2024.