FAIR VALUE MEASUREMENTS |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FAIR VALUE MEASUREMENTS | NOTE 12—FAIR VALUE MEASUREMENTS
Fair value measurements discussed herein represent management’s best estimate of fair value as of and during the year ended December 31, 2025.
Equity Securities – Metaplanet, Inc. The Company measures its investment in Metaplanet, Inc. at fair value on a recurring basis. The fair value of the Metaplanet Stock is based on quoted market prices on the Tokyo Stock Exchange, translated into U.S. dollars using the spot exchange rate at the balance sheet date. Due to the fair value being derived from observable and unadjusted quoted prices in active markets for identical assets, the measurement is classified as a Level 1 input in the fair value hierarchy.
Digital Assets. The Company holds digital assets, primarily Bitcoin, which are measured at fair value on a recurring basis in accordance with ASC 350-60. The fair value of the Company’s digital assets is determined using quoted prices on Anchorage Digital, the Company’s principal digital asset platform. Due to the fair value being derived from observable and unadjusted quoted prices in active markets for identical assets, the measurement is classified within Level 1 of the fair value hierarchy.
Call Option – Related Party. The call option asset represents the Company’s right to acquire an equity interest in BTC Media (see Note 3). The fair value of the call option asset is measured using a correlated Monte Carlo simulation model, which incorporates significant unobservable inputs, including management’s estimates regarding expected cash flows, probability of exercise, equity volatility for BTC Inc and the Company’s common stock, expected term, risk-free rate, discount for lack of marketability, correlation coefficient, and other assumptions that market participants would use in pricing the obligation. Due to the valuation relying on unobservable inputs, the asset is classified within Level 3 of the fair value hierarchy. Generally, increases in equity volatility or correlation coefficient would result in a higher fair value of the asset, whereas increases in discount for lack of marketability would result in a lower fair value.
The following tables present the Company’s assets measured at fair value on a recurring basis as of December 31, 2025:
There were no transfers between Level 1, Level 2, or Level 3 during the periods presented.
The following table presents the changes in Level 3 assets measured at fair value for the year ended December 31, 2025:
The call option was initially recognized as a liability at fair value on August 14, 2025. During the year ended December 31, 2025, the fair value of the call option increased significantly due primarily to a significant decrease in the fair value of the Company’s common stock, resulting in the instrument transitioning from a liability position at inception to an asset position of $199,060,000 at December 31, 2025. The total change in fair value for the year ended December 31, 2025, was a gain on $226,374,000, reported in Change in fair value of call option - related party in the consolidated statements of operations.
The following table presents quantitative information about the significant unobservable inputs used in the Company’s Level 3 fair value measurements as of December 31, 2025:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||