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| FAIR VALUE MEASUREMENTS | NOTE 9. FAIR VALUE MEASUREMENTS The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Cash Held in Trust Account As of June 30, 2026 and December 31, 2025, assets held in the Trust Account were comprised of approximately $9.1 million and $8.8 million in cash held by Trust Account, respectively. Fair Value Measurements Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in November 2021, when the Public Warrants were separately listed and traded, and subsequently transferred to a Level 2 measurement during the quarter ended March 31, 2022 due to low trading volume. The Company utilized a Monte-Carlo simulation model for the initial valuation of the Public Warrants. Beginning in November 2021, the fair value of Public Warrants has been measured based on the listed market price of such Public Warrants under the ticker “IXAQW”. On December 10, 2024, the Company received a notice from the Panel acknowledging that the Company had withdrawn its appeal of the October 7, 2024 delist determination issued by the Nasdaq. Accordingly, trading in the Company’s securities was suspended at the open of trading on December 12, 2024. On June 6, 2025, the Company filed a Form 25 Notification of Delisting with the SEC which removed the Company’s securities from the Nasdaq Stock Market. The Company’s Common Stock, Units and Warrants began to be quoted on the Pink Markets operated on The OTC Market systems (“OTC Market”) under the symbols “IXQUF,” “IXAQF” and “IXQWF.” The Company utilizes a probability-adjusted Black-Scholes method to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the unaudited condensed consolidated statements of operations. The estimated fair value of the Private Placement Warrant liabilities is determined using Level 3 inputs. Inherent in pricing models are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The following table provides the significant inputs to the probability-adjusted Black-Scholes method for the fair value of the Private Placement Warrants:
The following table provides a summary of the changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis:
The Company recognized $559,500 gain and $2,424,500 gain on change in the fair value of the Public Warrants and Private Placement Warrants in the accompanying unaudited condensed consolidated statements of operations for the three and six month period ended June 30, 2026, respectively and $746,000 loss and $373,000 loss on change in fair value of the Public Warrants and Private Placement Warrants in the accompanying unaudited condensed consolidated statements of operations for the three and six month period ended June 30, 2025, respectively. Derivative Liability-Conversion Feature The Company utilizes a Monte Carlo model to estimate the fair value of the conversion feature within the Extension Promissory Note, which is required to be recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the conversion feature are recognized as non-cash gains or losses in the accompanying unaudited condensed consolidated statements of operations. The key assumptions in the model relate to expected share-price volatility, risk-free interest rate, exercise price, expected term and the probability of occurrence of the transaction. The expected volatility was based on the average volatility of special purpose acquisition companies that are searching for an acquisition target. The risk-free interest rate is based on interpolation of Treasury yields with a term commensurate with the term of the warrants. The Company anticipates the dividend yield to be zero. The expected term of the warrants is assumed to be the estimated date of a Business Combination. The estimated fair value of the conversion feature related to the Extension Promissory Note as of issuance and for the periods ended June 30, 2026 and 2025 is zero. |
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