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FAIR VALUE MEASUREMENTS

12 Months Ended

Jun. 30, 2023

16.

FAIR VALUE MEASUREMENTS

The Company measures the fair value of financial assets and liabilities based on U.S. GAAP guidance which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

The Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables, or other financial liabilities depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition.

Financial assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income. Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities other than those classified as held-for-trading are measured at amortized cost, using the effective interest method of amortization. Financial assets classified as available-for-sale, including investments in equity securities, are measured at fair value, with unrealized gains and losses being recognized in income.

Financial instruments including receivables, accounts payable and accrued liabilities, and related party loans are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments.

The following tables present information about the assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023, and June 30, 2022, respectively, and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical instruments. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates, and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the financial instrument and include situations where there is little, if any, market activity for the instrument.

		As of June 30, 2023
	Note	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents		$	2,341	$	2,341	$	-	$	-
Investment in equity securities			9		9		-		-
Total		$	2,350	$	2,350	$	-	$	-
Liabilities:
Earnout Shares liability	10	$	10,521	$	-	$	-	$	10,521
Warrant liabilities	9,11c		4,989		-		3,279		1,710
Total		$	15,510	$	-	$	3,279	$	12,231

	As of June 30, 2022
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	5,280	$	5,280	$	-	$	-
Investment in equity securities		10		10		-		-
Total	$	5,290	$	5,290	$	-	$	-

The Yorkville Convertible Debt Financing discussed in Note 9 was initially recorded at fair value, which represented a nonrecurring fair value measurement using a Level 3 input. At June 30, 2023, the estimated fair value of this instrument approximated carrying value given that the instrument was issued in March 2023 and has a short time period until maturity.