Company: FEAV
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0000950170-25-019943
Chunk: 13

Company: 5E Advanced Materials, Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Item 8
Chunk 13
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 in Note 7–Debt, were valued upon initial recognition and at each reporting period at fair value using a with-and-without methodology utilizing a binomial lattice model (a model which utilizes Level 3 fair value inputs). Refer to Convertible Notes–Fair Value in Note 7–Debt for a table of certain inputs utilized in the valuation of the Convertible Notes and related Convertible Note Derivatives on certain dates. Changes in the fair value were recognized in Derivative gain (loss) in the statement of operations but had no related impact on the Company’s cash position or cash flows. The provision that resulted in separate accounting for the June 2024 Convertible Note Derivative began June 11, 2024 in connection with the issuance of the June 2024 Notes, and on September 16, 2024 for the September 2024 Convertible Note Derivative in connection with the issuance of the September 2024 Notes. Each of these provisions expired on December 31, 2024, and accordingly, the Convertible Note Derivatives were derecognized and the remaining fair values were transferred to additional paid-in capital.The components of changes to the fair value of the Convertible Note Derivatives for the period presented are summarized below.

        Derivative

        (Asset)/Liability

        (in thousands)

        Convertible note derivatives (asset) liability — June 30, 2024
         
        $
        3,315

        Additions, at fair value, September 16, 2024

        1,643

        Fair value adjustments (gain) loss, net

        (1,357
        )

        Reclassified to additional paid-in capital, at fair value, December 31, 2024

        (3,601
        )

        Convertible note derivatives (asset) liability — December 31, 2024
         
        $
        —

15

9. Financial Instruments and Fair Value MeasurementsAt December 31, 2024, cash equivalents as well as trade and other payables approximated their fair value due to their short-term nature. The Company’s financial instruments also consist of environmental reclamation bonds which are invested in certificates of deposit and money market funds which are classified as Level 1, the Convertible Notes which are classified as Level 2, and the Convertible Note Derivatives which were classified as Level 3. The reconciliation of changes in the fair value of the Convertible Note Der