v3.25.2
Recurring Fair Value Measurements
3 Months Ended 12 Months Ended
Mar. 31, 2025
Dec. 31, 2024
Iris    
Recurring Fair Value Measurements

Note 10. Recurring Fair Value Measurements

As of March 31, 2025 and December 31, 2024, the Company’s warrant liabilities were valued at $379,315 and $357,400, respectively. Under the guidance in ASC 815-40, the warrants do not meet the criteria for equity treatment. As such, the warrants must be recorded on the unaudited condensed balance sheets at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the warrant valuation will be adjusted to fair value, with the change in fair value recognized in the Company’s unaudited condensed statements of operations.

All of the Company’s permitted investments are held in the form of cash in the Company’s Trust Account and are classified within Level 1 of the fair value hierarchy. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. The Company’s warrant liability for the Private Placement Warrants is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the Private Placement Warrant liability is classified within Level 3 of the fair value hierarchy. The Company’s warrant liability for the Public Warrants is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. The fair value of the Public Warrant liability is classified within Level 1 of the fair value hierarchy.

The following table presents fair value information as of March 31, 2025 and December 31, 2024 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

Description

    

Amount at Fair Value

    

Level 1

    

Level 2

    

Level 3

March 31, 2025 (Unaudited)

 

  

 

  

 

  

 

  

Assets:

 

  

 

  

 

  

 

  

Cash held in Trust Account

$

1,345,389

$

1,345,389

$

$

Restricted cash - held in Trust Account

 

702,359

 

702,359

 

 

Liabilities:

 

  

 

  

 

  

 

  

Public Warrants

 

207,000

 

207,000

 

  

 

  

Private Warrants

 

172,315

 

 

 

172,315

December 31, 2024

 

  

 

  

 

  

 

  

Assets:

 

  

 

  

 

  

 

  

Cash held in Trust Account

$

2,016,274

$

2,016,274

$

$

Restricted cash - held in Trust Account

 

739,195

 

739,195

 

 

Liabilities:

 

  

 

  

 

  

 

  

Public Warrants

 

207,000

 

207,000

 

 

Private Warrants

 

150,400

 

 

 

150,400

Measurement - The Company established the initial fair value for the warrants on March 9, 2021, the date of the consummation of the IPO. On March 31, 2025 and December 31, 2024, the fair value was remeasured. In May 2021, the Public Warrants were separately traded in the open market and the valuation for the Public Warrants was based on unadjusted quoted prices at March 31, 2025 and December 31, 2024. For March 31, 2025 and December 31, 2024, the Company used a Monte Carlo simulation model to value the Private Placement Warrants.

The key inputs into the Monte Carlo simulation model for the Warrants were as follows at initial measurement, March 31, 2025 and December 31, 2024:

    

March 31, 

    

    

 

2025

(Unaudited)

December 31, 2024

 

Risk-free interest rate

4.10

%  

4.19

%

Expected term (years)

 

0.83

 

0.80

Expected volatility

 

14.40

%  

%

Stock Price

$

9.00

$

11.22

Exercise Price

$

11.50

$

11.50

The change in the fair value of the warrant and derivative liabilities classified as Level 3 for the year ended March 31, 2025 is summarized as follows:

Fair Value at December 31, 2024

    

$

150,400

Change in fair value

 

21,915

Fair Value at March 31, 2025

$

172,315

NOTE 10. RECURRING FAIR VALUE MEASUREMENTS

As of December 31, 2024 and December 31, 2023, the Company’s warrant liabilities were valued at $357,400 and $376,444, respectively. Under the guidance in ASC 815-40, the warrants do not meet the criteria for equity treatment. As such, the warrants must be recorded on the balance sheets at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the warrant valuation will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.

All of the Company’s permitted investments are held in a money market fund. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. The Company’s warrant liability for the Private Placement Warrants is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the Private Placement Warrant liability is classified within Level 3 of the fair value hierarchy. The Company’s warrant liability for the Public Warrants is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. The fair value of the Public Warrant liability is classified within Level 1 of the fair value hierarchy.

The following table presents fair value information as of December 31, 2024 and December 31, 2023 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

    

Amount at Fair

    

    

Description

Value

Level 1

Level 2

Level 3

December 31, 2024

Assets:

Cash equivalents held in Trust Account:

$

2,016,274

$

2,016,274

$

$

Restricted cash – held in Trust Account

739,195

739,195

Liabilities:

Public Warrants

207,000

207,000

Private Warrants

150,400

150,400

December 31, 2023

Assets:

Cash equivalents held in Trust

 

4,291,332

 

4,291,332

 

Liabilities:

Public Warrants

207,690

207,690

Private Warrants

168,754

168,754

Derivative liability

$

2,202

$

$

$

2,202

Measurement - The Company established the initial fair value for the warrants on March 9, 2021, the date of the consummation of the IPO. On December 31, 2024 and December 31, 2023, the fair value was remeasured. In May 2021, the Public Warrants were separately traded in the open market and the valuation for the Public Warrants was based on unadjusted quoted prices at December 31, 2024 and December 31, 2023. For December 31, 2024 and December 31, 2023, the Company used a Monte Carlo simulation model to value the Private Placement Warrants.

The key inputs into the Monte Carlo simulation model for the Warrants were as follows at initial measurement, December 31, 2024 and December 31, 2023:

    

December 31, 2024

    

December 31, 2023

Risk-free interest rate

4.19

%

4.91

%

Expected term (years)

0.80

0.87

Expected volatility

%

5.7

%

Stock Price

$

11.22

$

10.33

Exercise Price

$

11.50

$

11.50

The Company utilized a probability weighted expected return model for the initial valuation of the promissory note - related party bifurcated derivative. The derivatives were estimated utilizing a probability-weighted approach based on the expected outcomes of both a successful and unsuccessful business combination. The following table provides the significant inputs used in the model to measure the fair value of the bifurcated derivative upon each draw of the promissory note-related party:

    

December 31, 2023

Risk-free rate for debt

4.39 - 5.56

%

Expected term (years)

0.25 - 0.52

 

Likelihood of completing a business combination

 

8.88 - 11.68

%

The change in the fair value of the warrant and derivative liabilities classified as Level 3 for the year ended December 31, 2024 and 2023 is summarized as follows:

Warrant Liabilities

Derivative Liability

Fair value at December 31, 2022

$

418,246

$

Issuance of derivative liability

104,428

Change in fair value

(249,492)

(102,226)

Fair value at December 31, 2023

$

168,754

$

2,202

Change in fair value

(18,354)

(2,202)

Fair value at December 31, 2024

$

150,400

$