Company: FEAV
Filing Date: 2025-01-24
Form Type: PRE 14A
Source: 0000950170-25-008828
Chunk: 137

Company: 5E Advanced Materials, Inc.
Filing Date: 2025-01-24
Form: PRE 14A
Chunk 137
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 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 results 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 will expire on December 31, 2024, and accordingly, the fair value of the June 2024 Convertible Note Derivative and September 2024 Convertible Note Derivative, if any, will be transferred to additional paid-in capital at that time.

The components of changes to the fair value of the Convertible Note Derivatives for the periods 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                             |     |                   | (2,187 | ) |
| Convertible note derivatives (asset) liability — September 30, 2024 |     | $                 |  2,771 |   |

9. Financial Instruments and Fair Value Measurements

At September 30, 2024, cash equivalents as well as trade and other payables approximate their fair value due to their short-term nature. Our 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