Company: CHEF
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001517175-25-000002
Chunk: 109

Company: Chefs' Warehouse, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 8
Chunk 109
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 or probabilities of occurrence could result in a significantly higher or lower fair value measurement. Changes in the fair value of contingent earn-out liabilities are reflected in other operating expenses on the Company’s consolidated statements of operations. The following table presents the changes in Level 3 contingent earn-out liabilities:Balance December 30, 2022$17,294 Acquisition value5,765 Cash payments(16,375)Changes in fair value3,081 Balance December 29, 20239,765 Cash payments(5,750)Changes in fair value(3,265)Balance December 27, 2024$750 The contingent earn-out liability as of December 27, 2024 is reflected in accrued liabilities on the Company’s consolidated balance sheets. The long-term portion of contingent earn-out liability as of December 29, 2023 was $50 and is reflected as other liabilities on the Company’s consolidated balance sheets. The remaining short-term portion is reflected as accrued liabilities on the Company’s consolidated balance sheets. Contingent earn-out liability payments in excess of the acquisition date fair value of the underlying contingent earn-out liability are classified as operating activities on the Company’s consolidated statements of cash flows and all other such payments are classified as financing activities.Fair Value of Financial InstrumentsThe carrying amounts reported in the Company’s consolidated balance sheets for accounts receivable and accounts payable approximate fair value due to their immediate to short-term nature. The fair values of the asset-based loan facility and term loan approximated their book values as of December 27, 2024 and December 29, 2023 as these instruments had variable interest rates that reflected current market rates available to the Company and are classified as Level 2 fair value measurements.The following table presents the carrying value and fair value of the Company’s convertible notes and GreenLeaf Note (more fully described in Note 9). The fair value of the Company’s 2028 Convertible Senior Notes was based on Level 1 inputs as of December 29, 2023. Due to lower trading volume in the fourth quarter of fiscal 2024, the fair value of the 2028 Convertible Senior Notes was based on Level 2 inputs as of December 27, 2024. The fair value of the 2028 Convertible Senior Notes in both years was based on bid/ask quotes as of or near the balance sheet date. In estimating the fair value of its 2024 Convertible Senior Notes