Note 3 - Fair Value Measurements |
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| Fair Value Disclosures [Text Block] |
NOTE 3. FAIR VALUE MEASUREMENTS
The following tables present the Company’s financial instruments measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 (in thousands):
The Company's restricted cash held as a deposit is classified within Level 1 of the fair value hierarchy because it is valued using quoted market prices in active markets, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.
SKY digital assets are measured at fair value on a recurring basis using quoted prices in the Company's principal market (Level 1 inputs) in accordance with ASC 820. The Company did hold any digital assets as of December 31, 2025.
The Company determines its principal market as the market with the greatest volume and level of activity for SKY that is accessible to the Company. In making this determination, the Company considers factors including (i) its ability to legally and operationally transact in the market, (ii) observed trading volume and liquidity, (iii) pricing transparency and reliability, and (iv) the market in which the Company primarily executes its transactions.
Although certain global exchanges may report higher aggregate trading volumes, those markets are not considered accessible to the Company due to regulatory and operational constraints. Accordingly, the Company has concluded that Coinbase Exchange represents its principal market, as it exhibits the greatest volume and level of activity for SKY among markets accessible to the Company and provides observable, orderly pricing in USD-denominated markets.
The warrant liabilities as of December 31, 2025 were measured at fair value based on the intrinsic value of the warrants, determined using the quoted market price of the Company's common stock at the measurement date. Because the warrants themselves were not actively traded and the valuation relied on observable market inputs other than quoted prices for identical instruments, the liabilities were classified within Level 2 of the fair value hierarchy.
Warrant Liabilities
Pre-funded warrants with a nominal exercise price are economically similar to common stock and are measured based on intrinsic value, calculated as the market price of the Company's common stock less the nominal exercise price, multiplied by the number of warrant shares outstanding. On June 12, 2026 and June 15, 2026, the October 2025 Pre-Funded Warrants were modified, and all outstanding October 2025 Pre-Funded Warrants were exercised in full on a cashless basis on June 15, 2026. Accordingly, there were warrant liabilities outstanding as of June 30, 2026 or June 30, 2025.
The fair value of the January 2026 Pre-Funded Warrants (as defined in Note 8, “Financing Activities”) at issuance was determined using the closing price of the Company's common stock on January 20, 2026 (the first trading day following the announcement of the January 2026 Private Placement, which was made after market close on January 16, 2026).
See Note 10, “Common Stock Warrants and Warrant Liabilities” for additional information and the definitions related to the Company's warrants.
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