Fair Value Measurements |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | 9.Fair Value Measurements The following table presents fair value hierarchy of the Company’s financial assets measured at fair value on a recurring basis:
Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy under FASB ASC 820, Fair Value Measurement, are described as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 — Inputs other than quoted prices included in Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and Level 3 — Unobservable inputs that are supported by little or no market activity, which requires the Company to develop its own models. The financial instruments of the Company consist primarily of cash, U.S. government money market fund accounts, trade receivables, trade payables, Bitcoin and debt securities. Because carrying values of cash, trade receivables, and payables are equal to or approximate their fair value, the Company excluded them from the leveling requirements. U.S. government money market fund accounts are classified as Level 1 due to their short-term nature, their market interest rates and also based on the fact that they are publicly traded. Bitcoin purchased for investment, which are included in intangible digital assets are classified as Level 1 as the unadjusted quoted prices in active markets are used for the fair valuation. The Company valued a note receivable of $1,500 from the borrower at its face value because there were no significant changes to the financial condition of the borrower between the date the note was issued and the reporting date. See Note 10 for further details. |
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