XML 34 R16.htm IDEA: XBRL DOCUMENT v3.21.1
Note 10 - Fair Value (As Restated)
 12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

NOTE 10.

FAIR VALUE (As Restated)

 

The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three broad levels:

 

Level 1 — Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities.

 

Level 2 — Inputs other than quoted prices in active markets that are observable either directly or indirectly, including: quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active 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 data and require the reporting entity to develop its own assumptions.

 

At December 31, 2020 and 2019, our financial instruments included cash, cash equivalents, restricted cash, receivables, marketable securities, investments, accounts payable, liability-classified warrants, and long-term debt. The carrying value of cash, cash equivalents, restricted cash, receivables, and accounts payable approximates fair value due to the short-term nature of the instruments. The fair value of long-term debt is estimated using quoted prices for similar debt (level 2 in the fair value hierarchy). At December 31, 2020 , the estimated fair value of our long-term debt was $23,839,007 which exceeds the carrying amount of $23,057,650.

 

Warrants

 

We have determined that the public warrants issued in connection with Yellowstone's initial public offering in October 2020 are subject to treatment as a liability. We utilized a binomial lattice model to value the warrants as of their issuance date, and subsequently marked them to market based upon their observable trading price with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liability at October 26, 2020 was determined using Level 2 and Level 3 inputs. The key assumptions in the option pricing model utilized relate to expected share-price volatility, expected term, risk-free interest rate and dividend yield. The expected volatility as of the IPO Closing Date was derived from observable public warrant pricing on comparable ‘blank-check’ companies that recently went public in 2020 and 2021. The risk-free interest rate is based on the interpolated U.S. Constant Maturity Treasury yield. The expected term of the warrants is assumed to be six months until the close of Yellowstone's Business Combination, and the contractual five year term subsequently. The dividend rate is based on the historical rate, which we anticipate to remain at zero.

 

Our re-measurement of the public warrants from Yellowstone’s IPO date to December 31, 2020 resulted in a loss of $217,582 which is included within "Remeasurement of warrant liability" within our consolidated statement of operations. The warrants were classified as Level 1 instruments as of December 31, 2020.

 

Marketable Equity Securities, U.S. Trading Securities, and Corporate Bonds

 

Marketable equity securities and U.S. Treasury trading securities are reported at fair values. Substantially all of the fair value is determined using observed prices of publicly traded securities, level 1 in the fair value hierarchy.

 

            

Total Changes

 
  

Total Carrying

  

Quoted Prices

      

in Fair Values

 
  

Amount in

  

in Active

      

Included in

 
  Consolidated  Markets for  Realized Gains  Current Period 
  

Balance Sheet

  

Identical

  

and (Losses)

  

Earnings (Loss)

 
  

Dec. 31, 2020

  

Assets

  

(As Restated)

  

(As Restated)

 
                 

Marketable equity securities, U.S. Treasury trading securities, and corporate bonds

 $102,824,427  $102,824,427  $5,701,048  $(10,399,932)