Local Bounti Corporation General form of registration statement for all companies including face-amount certificate companies

General form of registration statement for all companies including face-amount certificate companies

Fair Value Measurements

Fair Value Measurements

6 Months Ended

12 Months Ended

Jun. 30, 2022

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

8. Fair Value Measurements

The following table sets forth, by level within the fair value hierarchy, the accounting of the Company’s financial assets and liabilities at fair value on a recurring and nonrecurring basis according to the valuation techniques the Company uses to determine their fair value:


	June 30, 2022
	Level 1		Level 2		Level 3

	(in thousands)
Recurring fair value measurements
Assets:
Money market funds, included in cash and cash equivalents	$	22,566	$	—	$	—

Total	$	22,566	$	—	$	—


	December 31, 2021
		Level 1	Level 2		Level 3

	(in thousands)
Recurring fair value measurements
Assets:
Money market funds, included in cash and cash equivalents	$	96,661	$	—	$	—

Total	$	96,661	$	—	$	—

The fair value of the Company’s money market funds is determined using quoted market prices in active markets for identical assets.

As of June 30, 2022 and December 31, 2021, the carrying value of all other financial assets and liabilities approximated their respective fair values.

As of June 30, 2022 and December 31, 2021, the Company had no transfers between levels of the fair value hierarchy of its liabilities measured at fair value.

. Fair Value Measurements


	December 31, 2021
	Level 1		Level 2		Level 3

	(in thousands)
Recurring fair value measurements
Assets:
Money market funds	$	96,661	$	—	$	—
Total	$	96,661	$	—	$	—

	December 31, 2020
	Level 1		Level 2		Level 3

	(in thousands)
Recurring fair value measurements
Assets:
Money market funds	$	4	$	—	$	—

Total	$	4	$	—	$	—

The fair value of the Company’s money market funds is determined using quoted market prices in active markets for identical assets.

As of December 31, 2021 and 2020, the carrying value of all other financial assets and liabilities approximated their respective fair values.

The following table presents changes in the Level 3 fair value measurement for the warrant liability on a recurring basis:


	Year Ended December 31,
	Convertible Notes			Warrant Liability

	(in thousands)
Balance as of December 31, 2020	$	—		$	—
Additions		26,050			1,415
Fair value measurement adjustments		5,067			10
Gain on Convertible Notes		(240	)		—
Interest expense on Convertible Notes (paid-in-kind)		1,364			—
Settlement of Convertible Notes and Warrants		(32,241	)		(1,425	)

Balance as of December 31, 2021	$	—		$	—

As mentioned in Note 3,

Business Combination and Recapitalization

, Convertible Notes had been converted and settled upon the close of the Business Combination.

As of December 31, 2021 and 2020, the Company had no transfers between levels of the fair value hierarchy of its liabilities measured at fair value.

- 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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