| Summary of Significant Accounting Policies | 2.
Summary of Significant Accounting Policies Basis
of Presentation The
Company’s consolidated financial statements been prepared in accordance with accounting principles generally accepted in the United
States (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.
All material intercompany accounts and transactions have been eliminated during the consolidation process. The Company manages its operations
as a single segment for the purposes of assessing performance and making operating decisions. Use
of Estimates The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets, liabilities, income, and expenses. The most significant estimates included
in these consolidated financial statements are those associated with the assumptions used to value equity instruments, valuation of its
long live assets for impairment testing, valuation of intangible assets, and the valuation of inventory. These estimates and assumptions
are based on current facts, historical experience and various other factors believed to be reasonable given the circumstances that exist
at the time the financial statements are prepared. Actual results may differ materially and adversely from these estimates. To the extent
there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Reclassifications Certain
amounts in the Company’s consolidated financial statements for prior periods have been reclassified to conform to the current period
presentation. These reclassifications have not changed the results of operations of prior periods. Principles
of Consolidation The
Company’s policy is to consolidate all entities that it controls by ownership of a majority of the outstanding voting stock. In
addition, the Company consolidates entities that meet the definition of a variable interest entity (“VIE”) for which it is
the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a VIE that most significantly
impact the entity’s economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits
from the entity that could potentially be significant to the entity. For consolidated entities that are less than wholly owned, the third
party’s holding of equity interest is presented as noncontrolling interests in the Company’s Consolidated Balance Sheets
and Consolidated Statements of Changes in Stockholders’ Equity. The portion of net loss attributable to the noncontrolling interests
is presented as net loss attributable to noncontrolling interests in the Company’s Consolidated Statements of Operations. The
accompanying consolidated financial statements include the accounts of Stem Holdings, Inc. and its wholly owned subsidiaries, Stem Holdings
Oregon, Inc., Stem Holdings IP, Inc., Opco, LLC, Stem Holdings Agri, Inc., Stem Oregon Acquisitions 2 Corp., Stem Oregon Acquisitions
3 Corp., Stem Oregon Acquisitions 4 Corp., 7LV USA Corporation, and Stem Oregon Acquisitions 1 Corp., and Driven Deliveries, Inc., which
was subsequently divested. In addition, the Company has consolidated YMY Ventures, WCV, LLC and NVD RE, Inc. under the variable interest
requirements. Cash
and Cash Equivalents The
Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents.
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The
Company’s cash is primarily maintained in checking accounts. These balances may, at times, exceed the U.S. Federal Deposit Insurance
Corporation insurance limits. As of March 31, 2022, and September 30, 2021, the Company had no cash equivalents or short-term
investments. The Company has not experienced any losses on deposits of cash and cash equivalents. Accounts
Receivable Accounts
receivable is shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the
aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance
for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. As of March 31, 2022, the reserve
for doubtful accounts was approximately $ 78,000 . Inventory Inventory
is comprised of raw materials, finished goods and work-in-progress such as pre-harvested cannabis plants and by-products to be extracted.
The costs of growing cannabis including but not limited to labor, utilities, nutrition, and irrigation, are capitalized into inventory
until the time of harvest. Inventory
is stated at the lower of cost or net realizable value, determined using weighted average cost. Cost includes expenditures directly related
to manufacturing and distribution of the products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and
the depreciation of manufacturing equipment and production facilities determined at normal capacity. Manufacturing overhead and related
expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes. Net
realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion,
disposal, and transportation. At the end of each reporting period, the Company performs an assessment of inventory obsolescence to measure
inventory at the lower of cost or net realizable value. Factors considered in the determination of obsolescence include slow-moving or
non-marketable items. Prepaid
Expenses and Other Current Assets Prepaid
expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid
expenses include consulting, advertising, insurance, and service or other contracts requiring up-front payments. Property
and Equipment Property,
equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line
method over the estimated useful lives of the assets Expenditures
for major renewals and improvements are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset
lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from
the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that
could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance
with the provisions of ASC 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present,
the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered
through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets,
the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See “Note
3 – Property, Equipment and Leasehold Improvements”. Property
and equipment are stated at cost less accumulated depreciation. Depreciation is provided on a straight-line method over the estimated
useful lives of the assets. The Company estimates useful lives as follows: Schedule of Estimated Useful Life of Assets
Buildings 20
Leasehold
improvements Shorter
of term of lease or economic life of improvement
Furniture
and equipment 5
Signage 5
Software
and related 5 Impairment
of Long-Lived Assets The
Company reviews the carrying value of its long-lived assets, which include property and equipment, for indicators of impairment whenever
events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. The Company considers
the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or
losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use
of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s
overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant
decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates assets
for potential impairment indicators at least annually and more frequently upon the occurrence of such events. The Company does not test
for impairment in the year of acquisition of properties, as long as those properties are acquired from unrelated third parties. The
Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the
related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying
amounts. In cases where estimated future net undiscounted cash flows are less than the carrying value, an impairment loss is recognized
equal to an amount by which the carrying value exceeds the fair value of the asset or asset group. Fair value is generally determined
using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined
to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values
of the long-lived assets are depreciated and amortized prospectively over the newly determined remaining estimated useful lives. An
impairment expense of $ 795
thousand was recorded for the six months ended
March 31, 2022. During the six months ended March 31, 2021, the Company determined that no
impairment was required. Capitalization
of Project Costs The
Company’s policy is to capitalize all costs that are directly identifiable with a specific property, would be capitalized if the
Company had already acquired the property, and when the property, or an option to acquire the property, is being actively sought after,
and either funds are available or will likely become available to exercise their option. All amounts shown capitalized prior to acquisition
of a property are included under the caption of Project Costs within the “Prepaid expenses and other current assets” line
item in the consolidated balance sheet. Equity
Method Investments Investments
in unconsolidated affiliates are accounted for under the equity method of accounting, as appropriate. The Company accounts for investments
in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5.0 During
the six months ended March 31, 2022, the Company recorded $ 0 Asset
Acquisitions The
Company has adopted ASU 2017-01, which clarifies the definition of a business with the objective of adding guidance to assist entities
with evaluating whether transactions should be accounted for as businesses acquisitions. As a result of adopting ASU 2017-01, acquisitions
of real estate and cannabis licenses do not meet the definition of a business combination and were deemed asset acquisitions, and the
Company therefore capitalized these acquisitions, including its costs associated with these acquisitions. Goodwill
and Intangible Assets Goodwill.
Intangible
Assets An
intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events
or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment
exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative
assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely
than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required
to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of
the asset that is amortized over the remaining useful life of that asset, if any. Subsequent reversal of impairment losses is not permitted. During
the six months ended March 31, 2022, and 2021, the Company determined that there were no Business
Combinations The
Company applies the provisions of ASC 805 in the accounting for acquisitions. ASC 805 requires the Company to recognize separately from
goodwill the assets acquired, and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date
is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the
liabilities assumed. While the Company uses its best estimates and assumptions to accurately apply preliminary value to assets acquired
and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently
uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date,
the Company records adjustments in the current period, rather than a revision to a prior period. Upon the conclusion of the measurement
period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments
are recorded in the consolidated statements of operations. Accounting for business combinations requires management to make significant
estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed,
restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although the Company believes
the assumptions and estimates made have been reasonable and appropriate, they are based in part on historical experience and information
obtained from management of the acquired companies and are inherently uncertain. Unanticipated events and circumstances may occur that
may affect the accuracy or validity of such assumptions, estimates, or actual results. Contingent
Consideration The
Company accounts for “contingent consideration” according to FASB ASC 805, “Business Combinations” (“FASB
ASC 805”). Contingent consideration typically represents the acquirer’s obligation to transfer additional assets or equity
interests to the former owners of the acquiree if specified future events occur or conditions are met. FASB ASC 805 requires that contingent
consideration be recognized at the acquisition-date fair value as part of the consideration transferred in the transaction. FASB ASC
805 uses the fair value definition in Fair Value Measurements, which defines fair value as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As defined in FASB
ASC 805, contingent consideration is (i) an obligation of the acquirer to transfer additional assets or equity interests to the former
owners of an acquiree as part of the exchange for control of the acquiree, if specified future events occur or conditions are met or
(ii) the right of the acquirer to the return of previously transferred consideration if specified conditions are met. Warrant
Liability The
Company accounts for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value
at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair
value is recognized in the Company’s consolidated statements of operations. The fair value of the warrants issued by the Company
has been estimated using a Black Scholes model. Embedded
Conversion Features The
Company evaluates embedded conversion features within convertible debt to determine whether the embedded conversion feature(s) should
be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in the statement
of operations. If the conversion feature does not require recognition of a bifurcated derivative, the convertible debt instrument is
evaluated for consideration of any beneficial conversion feature (“BCF”) requiring separate recognition. When the Company
records a BCF, the intrinsic value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument
(offset to additional paid-in capital) and amortized to interest expense over the life of the debt. Income
Taxes The
provision for income taxes is determined in accordance with ASC 740, “Income Taxes”. The Company files a consolidated United
States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items
of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal
income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred
taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for
financial-reporting and tax-reporting purposes. As of September 30, 2021, and 2020, such net operating losses were offset entirely by
a valuation allowance. The
Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely
than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately
realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company
classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively,
on the consolidated statements of operations. In
December 2017, the Tax Cuts and Jobs Act (TCJA or the Act) was enacted, which significantly changes U.S. tax law. In accordance with
ASC 740, “Income Taxes”, the Company is required to account for the new requirements in the period that includes the date
of enactment. The Act reduced the overall corporate income tax rate to 21.0 In
December 2020, the Company issued a significant number of new shares in its acquisition of Driven (see Note . The effect of these issuances
is most likely, the Company and Driven have experienced the requisite change of control as promulgated under the US Internal Revenue
Code section 382. The effect of this will be that going forward, the ability of the Company and Driven to utilize their respective U.S.
Federal net operating loss carryforwards from prior to December 29, 2020, will be limited in its usage. In order to determine the specific
effect, the Company must perform the computations required under the Internal Revenue Code, which have not yet been performed. The Company
expects it will perform the required computations in the coming fiscal year. On December 15, 2021, pursuant to a Share Exchange Agreement,
the Company sold Driven Deliveries and its subsidiaries to the shareholders of Budee, Inc. in a transaction which the Company fully divested
all of its interests in Driven Deliveries and all of its subsidiaries. Included in the terms of the Share Exchange Agreement, the shareholder
of Budee, Inc., and prior officer of Driven Deliveries returned approximately 11.5
million shares of the Company’s common
stock and assumed approximately $ 7.1
million of the Companies liabilities. Notwithstanding,
the Company will continue to be responsible for approximately $ 210,000
Revenue
Recognition The
Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration
which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an
entity determines are within the scope of Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic
606), the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations
in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract;
and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to
contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services
it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company
assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether
each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated
to the respective performance obligation when (or as) the performance obligation is satisfied. Revenue
for the Company’s product sales has not been adjusted for the effects of a financing component as the Company expects, at contract
inception, that the period between when the Company’s transfers control of the product and when the Company receives payment will
be one year or less. Product shipping and handling costs are included in cost of product sales. Effective
October 1, 2019, the Company adopted the requirements of ASU 2014-09 (ASC 606) and related amendments, using the modified retrospective
method. The adoption of ASC 606 did not have a significant impact on the Company’s revenue recognition policy as revenues related
to wholesale and retail revenue are recorded upon transfer of merchandise to the customer, which was the effective policy under ASC 605
previously. The
following policies reflect specific criteria for the various revenue streams of the Company: Cannabis
Dispensary, Cultivation and Production Revenue
is recognized upon transfer of retail merchandise to the customer upon sale transaction, at which time its performance obligation is
complete. Revenue is recognized upon delivery of product to the wholesale customer, at which time the Company’s performance obligation
is complete. Terms are generally between cash on delivery to 30 days for the Company’s wholesale customers. The
Company’s sales environment is somewhat unique, in that once the product is sold to the customer (retail) or delivered (wholesale)
there are essentially no returns allowed or warranty available to the customer under the various state laws. Delivery
1) Identify
the contract with a customer The
Company sells retail products directly to customers. In these sales there is no formal contract with the customer. These sales have commercial
substance and there are no issues with collectability as the customer pays the cost of the goods at the time of purchase or delivery.
2) Identify
the performance obligations in the contract The
Company sells its products directly to consumers. In this case these sales represent a performance obligation with the sales and any
necessary deliveries of those products.
3) Determine
the transaction price The
sales that are done directly to the customer have no variable consideration or financing component. The transaction price is the cost
that those goods are being sold for plus any additional delivery costs.
4) Allocate
the transaction price to performance obligations in the contract For
the goods that the Company sells directly to customers, the transaction price is allocated between the cost of the goods and any delivery
fees that may be incurred to deliver to the customer.
5) Recognize
revenue when or as the Company satisfies a performance obligation For
the sales of the Company’s own goods the performance obligation is complete once the customer has received the product. Leases The
Company recognizes rental revenue from tenants, including rental abatements, lease incentives and contractual fixed increases attributable
to operating leases, on a straight-line basis over the term of the related leases when collectability is reasonably assured. The
Company makes estimates of the collectability of its tenant receivables related to base rents, straight-line rent, and other revenues.
In the current fiscal year, the Company began significant rental operations. The Company considers such things as historical bad debts,
tenant creditworthiness, current economic trends, facility operating performance, lease structure, developments relevant to a tenant’s
business, and changes in tenants’ payment patterns in its analysis of accounts receivable and its evaluation of the adequacy of
the allowance for doubtful accounts. Specifically, for straight-line rent receivables, the Company’s assessment includes an estimation
of a tenant’s ability to fulfill its rental obligations over the remaining lease term. On
October 1, 2020, the Company adopted ASC 842 and elected to apply the new standard at the adoption date and recognize a cumulative effect
as an adjustment to retained earnings. Upon calculation the effect on retained earnings was immaterial and no adjustment was deemed necessary.
Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed
after the adoption of Topic 842, we combine the lease and non-lease components in determining the lease liabilities and right of use
(“ROU”) assets. Our
lease agreements generally do not provide an implicit borrowing rate; therefore, an internal incremental borrowing rate is determined
based on information available at lease commencement date for purposes of determining the present value of lease payments. We used the
incremental borrowing rate on March 31, 2022, for all leases that commenced prior to that date. In determining this rate, which is used
to determine the present value of future lease payments, we estimate the rate of interest we would pay on a collateralized basis, with
similar payment terms as the lease and in a similar economic environment. Under
Topic 842, operating lease expense is generally recognized evenly over the term of the lease. Lease costs were approximately $ 202,000
and $ 529,000 ,
respectively for the three and six months ended
March 31, 2022 and approximately $ 257,000
and $ 426,000 The
Company has nine operating leases consisting with remaining lease terms ranging from 10
months to 170
months. Lease
Costs Schedule of Lease Costs
Six Months Ended March 31, 2022 Six Months Ended March 31, 2021
Components of total lease costs:
Operating lease expense $ 529 $ 426
Total lease costs $ 529 $ 426 Lease
positions as of March 31, 2022 ROU
lease assets and lease liabilities for our operating leases were recorded in the consolidated condensed balance sheet as follows: Schedule of ROU Lease Assets and Lease Liabilities
March 31, 2022
Assets
Right of use asset $ 3,981
Total assets $ 3,981
Liabilities
Operating lease liabilities – short term $ 499
Operating lease liabilities – long term 3,601
Total lease liability $ 4,100 Lease
Terms and Discount Rate Schedule of Lease Terms and Discount Rate
Weighted average remaining lease term (in years) – operating lease 9.8
Weighted average discount rate – operating lease 12.61 % Cash
Flows Schedule of Cash Flow Related to Lease
Six Months Ended March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
ROU amortization $ 529
Cash paydowns of operating liability $ (529 ) Schedule of Future Minimum Lease Payments
The future remaining minimum lease payments under the leases are as follows for
the years ended September 30:
2022 $ 499
2023 985
2024 788
2025 687
2026 659
Thereafter 4,670
Total future minimum lease payments 8,288
Less: Lease imputed interest (4,188 )
Total $ 4,100 Disaggregation
of Revenue For
the period ended March 31, 2022, revenue reported was primarily from the sale of cannabis and related products accounted for under ASC
606. The
following table illustrates our revenue by type related to the three months ended March 31, 2022, and 2021 respectively: Schedule of Disaggregation of Revenue
Three Months Ended March 31, 2022 2021
Revenue
Wholesale $ 1,576 $ 1,204
Retail 3,221 5,970
Rental - 5
Other 19 140
Total revenue 4,815 7,319
Discounts and returns (679 ) (1,830 )
Net Revenue $ 4,136 $ 5,489 The
following table illustrates our revenue by type related to the six months ended March 31, 2022, and 2021 respectively:
Six Months Ended March 31, 2022 2021
Revenue
Wholesale $ 2,130 $ 2,324
Retail 7,587 10,697
Rental - 9
Product Sales - 229
Other 40 258
Total revenue 9,757 13,517
Discounts and returns (1,411 ) (2,759 )
Net Revenue $ 8,346 $ 10,758 Geographical
Concentrations As
of March 31, 2022, the Company is primarily engaged in the production and sale of cannabis, which is only legal for recreational use
in 15 states and D.C., with lesser legalization, such as for medical use in an additional 21 states and D.C., as of the time of these
consolidated financial statements. In addition, the United States Congress has passed legislation, specifically the Agriculture Improvement
Act of 2018 (also known as the “Farm Bill”) that has removed production and consumption of hemp and associated products from
Schedule 1 of the Controlled Substances Act. Cost
of Goods Sold Cost
of sales represents costs directly related to manufacturing and distribution of the Company’s products. Primary costs include raw
materials, packaging, direct labor, overhead, shipping and handling and the depreciation of manufacturing equipment and production facilities.
Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes. The
Company recognizes the cost of sales as the associated revenues are recognized. Fair
Value of Financial Instruments As
defined in the authoritative guidance, fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. To
estimate fair value, the Company utilizes market data or assumptions that market participants would use in pricing the asset or liability,
including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable,
market corroborated or generally unobservable. The
authoritative guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (“Level 1” measurements)
and the lowest priority to unobservable inputs (“Level 3” measurements). The three levels of the fair value hierarchy are
as follows: Level
1 — Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities. Level
2 — Other inputs that are observable, directly, or indirectly, such as quoted prices in markets that are not active, or inputs
which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level
3 — Unobservable inputs for which there is little or no market data and which the Company makes its own assumptions about how market
participants would price the assets and liabilities. In
instances in which multiple levels of inputs are used to measure fair value, hierarchy classification is based on the lowest level input
that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular
input to the fair value measurement in its entirety requires judgment and consi |
