Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the years ended December 31, 2021 and 2020. The fair value of the Company’s cash, accounts receivable, other receivables, accounts payable and accrued expenses approximates carrying value due to their short-term nature. The Company’s notes receivable, lease receivables, contingent consideration payable, derivative liabilities, convertible notes payable, and notes payable approximate fair value due to the instruments bearing market rate of interest. These measurements were identified as Level 1 measurements, due to the proximity of fair value to carrying values. The fair value of stock options granted were estimated based on a Black-Scholes model during the years ended December 31, 2021 and 2020. The estimated fair value of the derivative liabilities, which represent warrant liabilities that are denominated in Canadian Dollar, represent Level 3 measurements. The assumptions that the Company used in the fair valuation of derivative liabilities as of December 31, 2021 are disclosed in Note 13.

The following table details the fair value measurements within the fair value hierarchy of the Company’s financial instruments, which includes the Level 3 liabilities:


	Fair value at December 31, 2021
	Total		Level 1		Level 2		Level 3
Liabilities:
Derivative liability	$	3,502	$	—	$	—	$	3,502

Total liabilities	$	3,502	$	—	$	—	$	3,502


	Fair value at December 31, 2020
	Total		Level 1		Level 2		Level 3
Liabilities:
Derivative liability	$	5,807	$	—	$	—	$	5,807

Total liabilities	$	5,807	$	—	$	—	$	5,807

There were no transfers between fair value levels during the years ended December 31, 2021 and the year ending December 31, 2020.

(a)	Financial – Risk Management

The Company is exposed in varying degrees to a variety of financial instruments related risks. The Board mitigates these risks by assessing, monitoring and approving the Company’s risk management processes.

(b)	Credit Risk

Credit risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations. The Company’s credit risk is primarily attributable to cash, lease receivables, other receivables, and notes receivable. The Company’s maximum credit risk exposure is equivalent to the carrying value of these instruments.

The risk exposure is limited to the carrying amounts at the statement of financial position date. The risk to cash deposits is mitigated by holding these instruments with regulated financial institutions. Lease receivables, notes receivables and other receivables credit risk arises from the possibility that principal and interest due may become uncollectible. The Company mitigates this risk by managing and monitoring the underlying business relationships.

The Company maintains cash with federally insured financial institutions. As of December 31, 2021 and 2020, the Company exceeded federally insured limits by approximately $10,866

in 2021 and $5,000 in 2020. The Company has historically not experienced any losses in such accounts. As of December 31, 2021, the Company held approximately $29 in cash in a Canadian account that is denominated in C$.

As of December 31, 2021 and 2020, the maximum credit exposure related to the carrying amounts of accounts receivable, notes receivable and lease receivables was $12,722 and $13,178 respectively.

(c)	Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations associated with financial liabilities. The Company manages liquidity risk through the management of its capital structure. The Company’s approach to managing liquidity is to raise sufficient capital to settle obligations and liabilities when due.

The Company has the following gross contractual obligations as of December 31, 2021, which are expected to be payable in the following respective periods:


	Less than 1 year		1 to 3 years		3 to 5 years		Greater than 5 years		Total
Accounts payable and accrued liabilities	$	11,542	$	1,200	$	—	$	—	$	12,742
Convertible notes, notes payable and accrued interest		6,197		64,616		—		—		70,813
Contingent consideration payable		—		2,393		—		—		2,393

Total	$	17,739	$	68,209	$	—	$	—	$	85,948

(d)	Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s secured convertible notes with GGP (Note 11) had variable interest rates and were paid in full in December 2020.

(e)	Foreign Exchange Risk

The Company is exposed to exchange rate fluctuations between United States and Canadian dollars. The Company’s share price is denominated in Canadian dollars. If the Canadian dollar declines against the United States dollar, the United States dollar amounts available to fund the Company through the exercise of stock options or warrants will be less. The Company also has bank accounts with balances of $29 in Canadian dollars. The value of these bank balances if converted to U.S. dollars will fluctuate. While the Company maintains a head office in Canada where it incurs expenses primarily denominated in Canadian dollars, such expenses are a small portion of overall expenses incurred by the Company. The Company does not have a practice of trading derivatives and does not engage in “natural hedging” for funds held in Canada.

(f)	Other Price Risk

Price risk is the risk of variability in fair value due to movements in equity or market prices. The Company is subject to risk of prices to its products due to competitive or regulatory pressures.