Gevo, Inc. Fair Value Disclosure
23. Fair Value Measurements
Accounting standards define fair value, outline a framework for measuring fair value, and detail the required disclosures about fair value measurements. Under these standards, fair value is defined 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 in the principal or most advantageous market. Standards establish a hierarchy in determining the fair market value of an asset or liability. The fair value hierarchy has three levels of inputs, both observable and unobservable. Standards require the utilization of the highest possible level of input to determine fair value.
Level 1 – inputs include quoted market prices in an active market for identical assets or liabilities.
Level 2 – inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data.
Level 3 – inputs are unobservable and corroborated by little or no market data.
The carrying value and fair value, by fair value hierarchy, of the Company’s financial instruments at December 31, 2025, and 2024, are as follows (in thousands):
| Fair Value Measurements at December 31, 2025 | |||||||||||
Quoted | ||||||||||||
Prices in | ||||||||||||
Active | Significant | |||||||||||
Markets for | Other | Significant | ||||||||||
Fair Value at | Identical | Observable | Unobservable | |||||||||
December 31, | Assets | Inputs | Inputs | |||||||||
Recurring |
| 2025 | | (Level 1) | | (Level 2) | | (Level 3) | ||||
Cash and cash equivalents (1) | $ | 59,904 | $ | 59,904 | $ | — | $ | — | ||||
Commodities derivative instruments | 91 | — | 91 | — | ||||||||
Total | $ | 59,995 | $ | 59,904 | $ | 91 | $ | — | ||||
Fair Value Measurements at December 31, 2024 | ||||||||||||
Quoted | ||||||||||||
Prices in | ||||||||||||
Active | Significant | |||||||||||
Markets for | Other | Significant | ||||||||||
Fair Value at | Identical | Observable | Unobservable | |||||||||
December 31, | Assets | Inputs | Inputs | |||||||||
| 2024 | | (Level 1) | | (Level 2) | | (Level 3) | |||||
Recurring |
| |
| |
| |
| | ||||
Cash and cash equivalents (1) | $ | 189,389 | $ | 189,389 | $ | — | $ | — | ||||
| (1) | Cash and cash equivalents includes $59.9 million and $186.7 million invested in U.S. government money market funds as of December 31, 2025, and 2024, respectively. |
The Company had no transfers of assets or liabilities between fair value hierarchy levels during the years ended December 31, 2025, and 2024.
On October 31, 2025, the Company received a $5.0 million note receivable as partial consideration for the sale of our subsidiary, Agri-Energy, LLC. The note bears interest at the Federal Funds Rate. The Company used a market approach to adjust the value of the note to fair value and recorded a discount on the note of $1.6 million. Factors considered by the Company in determining fair value were (i) the credit standing of the issuer, (ii) the secured nature of the note and, (iii) the prevailing rates for similar instruments based on the issuer’s credit.
Carrying | | Estimated | ||||
Value | Fair Value | |||||
Note Receivable- - A.E. Innovation, LLC | $ | 3,480 | $ | 3,480 | ||
The fair value of the Remarketed Bonds and the Series 2025A bonds are estimated using the Black-Derman-Toy interest rate lattice framework. The effective maturity of the Remarketed Bonds was assumed to be April 1, 2026 (two years from issuance) with repayment of 100% of principal on that date. The impact of the Company’s optional redemption feature, effective November 1, 2024, is appropriately captured by the Black-Derman-Toy interest rate lattice.
The carrying values and estimated fair values of the Term Loan, the Remarketed Bonds and the Series 2025A Bonds as of December 31, 2025, are summarized as follows (in thousands):
| Carrying | | Estimated | |||
Value | Fair Value | |||||
Term Loan | $ | 105,000 | $ | 104,476 | ||
Remarketed Bonds | $ | 28,155 | $ | 25,153 | ||
Series 2025A Bonds | $ | 40,000 | 40,154 | |||
Redeemable non-controlling interest
The following table reflects the changes in the fair value of the redeemable non-controlling interest as of December 31, 2025 (in thousands):
| Redeemable Non- | ||
Controlling Interest | |||
Contributions from non-controlling member made on January 31, 2025 | $ | 5,000 | |
Distribution payment to non-controlling member | (1,454) | ||
Net income attributable to non-controlling member | 1,207 | ||
Fair value adjustment | 79 | ||
Ending balance as of December 31, 2025 | $ | 4,832 | |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
| 2023 | Mar 7, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Feb 24, 2022 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.