Annual report pursuant to Section 13 and 15(d)

FAIR VALUE OF FINANCIAL INSTRUMENTS

v3.20.4
FAIR VALUE OF FINANCIAL INSTRUMENTS
12 Months Ended
Dec. 31, 2020
FAIR VALUE OF FINANCIAL INSTRUMENTS  
FAIR VALUE OF FINANCIAL INSTRUMENTS

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

Methods and assumptions used to estimate the fair value of financial instruments are affected by the duration of the instruments and other factors used by market participants to estimate value. The carrying amounts for cash and equivalents, restricted cash, accounts receivable, and accounts payable approximate their estimated fair value because of the short durations of the instruments and inconsequential rates of interest. Management also believes that the carrying value of long-term debt also approximates their estimated fair value because the terms of the facilities are representative of current market conditions. While management believes the carrying value of our finance lease obligation approximates its fair value because certain terms of the lease were renegotiated, management also believes that precise estimates are not practical because of the unique nature of the relationships.

Interest Rate Cap Agreement. In April 2018, the Company purchased an Interest Rate Cap from Capital One, N.A. (“Capital One”) for $238,000 in order to manage expected interest rate increases on the Prior Notes. The agreement is for a notional amount of $50 million and expires on March 31, 2021, but effectively had no value per the tables below. The Interest Rate Cap has a strike rate of 3.00% and resets every three months at the end of March, June, September, and December.

The following tables present the fair value of those assets and liabilities measured on a recurring basis as of December 31, 2020 and 2019.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

not designated

 

 

 

December 31, 2020

for hedging:

    

Balance Sheet Location

    

Level 1

    

Level 2

    

Level 3

    

Total

Interest rate cap

 

Deposits and other assets

 

$

 —

 

$

 —

 

$

 —

 

$

 —

Common stock warrants

 

Common stock warrant liability

 

 

 —

 

 

 —

 

 

2,653

 

$

2,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

not designated

 

 

 

December 31, 2019

for hedging:

    

Balance Sheet Location

    

Level 1

    

Level 2

    

Level 3

    

Total

Interest rate cap

 

Deposits and other assets

 

$

 —

 

$

 —

 

$

 —

 

$

 —

Common stock warrants

 

Common stock warrant liability

 

 

 —

 

 

 —

 

 

2,055

 

$

2,055