v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 5. Fair Value Measurements

 

The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The FASB has issued guidance that defines fair value as the exchange price that would be received for an asset (or paid to transfer a liability) in the principal, or most advantageous market in an orderly transaction between market participants. This guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance categorizes assets and liabilities at fair value into one of three different levels depending on the observation of the inputs employed in the measurements, as follows:

 

  ● Level 1 – inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets providing the most reliable measurement of fair value since it is directly observable.
     
  ● Level 2 – inputs to the valuation methodology which include quoted prices for similar assets or liabilities in active markets. These inputs are observable, either directly or indirectly, for substantially the full-term of the financial instrument.
     
  ● Level 3 – inputs to the valuation methodology which are unobservable and significant to the measurement of fair value.

 

The Company applies ASC 825 in the valuation of the derivative related to the Forward Purchase Agreement for financial statement purposes. The fair value of the derivative asset was determined using a valuation model that incorporates the following (i) the probability of the consummation of the FGMC and BOXABL merger, (ii) the closing price of FGMC common stock as of June 30, 2026, and (iii) the projected volatility of FGMC common stock both before and after the expected merger with BOXABL. Accordingly, the asset is classified within Level 3 of the fair value hierarchy.

 

The Company applies ASC 820 in the valuation of ETH held by the Company for financial statement purposes. The fair value of ETH uses Level 1 inputs to reflect the price that would be received for ETH in a current sale, which assumes an orderly transaction between market participants on the measurement date in the Company’s principal market, or in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. The Company determines its principal market (or in the absence of a principal market, the most advantageous market) on a periodic basis to determine which market is its principal market for the purpose of calculating fair value for the creation of quarterly and annual financial statements. Issuer-specific events, market trends, bid/ask quotes of brokers and information providers and other data may be reviewed in the course of making a good faith determination of the digital asset’s fair value.

 

Financial instruments measured, on a recurring basis, at fair value in accordance with the guidance promulgated by the FASB as of June 30, 2026 and December 31, 2025 are as follows (in thousands):

 

As of June 30, 2026  Level 1   Level 2   Level 3   Total 
FG Merger II Corp. common shares  $15,090   $–   $–   $15,090 
Forward Purchase Agreement derivative asset  $–   –   $850    850 
Financial instrument fair value  $15,090   $–   $850   $15,940 

 

As of December 31, 2025  Level 1   Level 2   Level 3   Total 
ETH digital assets  $119,384   $–   $–   $119,384 
Financial instrument fair value  $119,384   $–   $–   $119,384