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Note 14 - Fair Value of Financial Instruments
12 Months Ended
Sep. 26, 2021
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

14    FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate value.

 

The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of those instruments. Investments totaling $4,226,000, including our 16.7% ownership of the non-voting common stock and 0.7% of the voting common stock of TCT, which represents 8.7% of total TCT stock, and a private equity investment, are carried at cost. 

 

At  September 26, 2021, we had no floating rate debt. Our fixed rate debt consists of $482,616,000 principal amount of the Term Note. At September 26, 2021, based on market quotations, the fair value approximates carrying value. This represents a Level 2 fair value measurement.

 

As discussed more fully in Notes 6 and 12, we recorded a liability for the Warrants issued in connection with the Warrant Agreement. The liability was initially measured at its fair value and we re-measure the liability to fair value each reporting period, with changes reported in other non-operating income (expense). The initial fair value of the Warrants was $16,930,000. The fair value of the Warrants at September 26, 2021, September 27, 2020, and September 29, 2019 is $71,000, $363,000 and $1,195,000, respectively. In other, net non-operating income (expense) in the Consolidated Statements of Income (loss) and Comprehensive Income (loss), we recognized income of $292,000 in 2021, $832,000 in 2020, and of $612,000 in 2019, for adjustments in the fair value of the Warrants.

 

The following assumptions were used to estimate the fair value of the Warrants: 

 

  

2021

  

2020

  

2019

 
             

Volatility (Percent)

  43   84   48 

Risk-free interest rate (Percent)

  0.05   0.12   1.58 

Expected term (Years)

  0.5   1.5   2.5 

Estimated fair value (Dollars)

  0.12   0.06   0.2