Note 13 - Fair Value Measurements

3 Months Ended

Mar. 31, 2021

13.

Fair Value Measurements

Accounting standards define fair value, outline a framework for measuring fair value, and detail the required disclosures about fair value measurements. Under these standards, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. Standards establish a hierarchy in determining the fair market value of an asset or liability. The fair value hierarchy has

three

levels of inputs, both observable and unobservable. Standards require the utilization of the highest possible level of input to determine fair value.

Level

– inputs include quoted market prices in an active market for identical assets or liabilities.

Level

– inputs are market data, other than Level

that are observable either directly or indirectly. Level

inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data.

Level

– inputs are unobservable and corroborated by little or

market data.

These tables present the carrying value and fair value, by fair value hierarchy, of the Company's financial instruments at

March 31, 2021

and

December 31, 2020,

respectively (in thousands). The Company believes that the fair value of its Loans Payable - Other approximated book value, which totaled

$1.2

million and

$1.3

million at

March 31, 2021

and

December 31, 2020,

respectively.

			Fair Value Measurements at March 31, 2021 (In thousands)
	Fair Value at March 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring:
Derivative Warrant Liability	$	84	$	—	$	—	$	84

Nonrecurring
Palladium and finished goods inventory	$	880	$	264	$	616	$	—

			Fair Value Measurements at December 31, 2020 (In thousands)
	Fair Value at December 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring:
Derivative Warrant Liability	$	31	$	—	$	—	$	31


Nonrecurring
Corn, palladium and finished goods inventory	$	866	$	235	$	631	$	—

The following table provides changes to those fair value measurements using Level

inputs for the

three

months ende

March 31

2021

(in thousands):

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

	Derivative Warrant Liability

Balance, December 31, 2020	$	31

Total loss included in earnings		53

Balance, March 31 , 2021	$	84

There were

transfers to or from Level

in the

three

months ended

March 31

2021

Inventories.

The Company records its corn and palladium inventory at fair value only when the Company's cost of corn and palladium purchased exceeds the market value for corn. The Company determines the market value of corn and palladium based upon Level

inputs using quoted market prices. The Company records its hydrocarbon, isobutanol and ethanol inventory at market using Level

inputs.

Derivative Warrant Liability

. The Company valued the Series F Warrants and Series K Warrants using a Monte-Carlo model (Level

) and other warrants using Black-Scholes models comprised of some inputs requiring the use of Monte-Carlo models (Level

While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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