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

Note 21: Fair Value

 

The Company complies with the provisions of ASC 820, Fair Value Measurements, for its financial and non-financial assets and liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis.

 

The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety.

 

As of June 30, 2026 and 2025, the Company has classified the Private Placement Warrants and the Representative Warrants as Level 3 fair value measurements. Management evaluates a variety of inputs and then estimates fair value based on those inputs. As discussed below, the Company utilized the Black Scholes Model in valuing the Private Placement Warrants and Representative Warrants.

 

The estimated fair value of cash, trade receivables, accounts payable, accrued expenses and other current liabilities are based on Level 1 inputs as the fair values approximate carrying amounts as of June 30, 2026, and 2025, based on the short-term nature and maturity of these instruments.

 

The estimated fair value of the credit facility is based on Level 2 inputs, which consist of interest rates that are currently available to the Company for issuance of debt with similar terms and remaining maturities. As of June 30, 2026, and 2025 the estimated fair value of the Company’s short and long-term debt approximates it carrying value due to market interest rates charged on such debt or their short-term maturities.

 

The Company recomputes the fair value of the Private and the Representative Warrants at the issuance date and the end of each quarterly reporting period. Such value computation includes subjective input assumptions that are consistently applied each period. If the Company were to alter its assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different.

 

 

The Company utilized the following assumptions to estimate fair value of the Private Warrants and Representative Warrants as of:

 

   June 30,   June 30, 
   2026   2025 
Stock Price  $5.84   $3.77 
Exercise price per share  $11.50   $11.50 
Risk-free interest rate   4.00%   3.63%
Expected term (years)   1.62    2.62 
Expected volatility   50.3%   47.1%
Expected dividend yield   -    - 

 

The significant assumptions using the Lattice model approach for valuation of the Private Placement Warrants and Representative Warrants were determined in the following manner:

 

  (i) Risk-free interest rate: the risk-free interest rate is based on the U.S. Treasury rate with a term matching the time to expiration.
     
  (ii) Expected term: the expected term is estimated to be equivalent to the remaining contractual term.
     
  (iii) Expected volatility: expected stock volatility is based on daily observations of the Company’s historical stock value and implied by market price of the Public Warrants, adjusted by guideline public company volatility.
     
  (iv) Expected dividend yield: expected dividend yield is based on the Company’s anticipated dividend payments. As the Company has never issued dividends, the expected dividend yield is 0, and this assumption will be continued in future calculations unless the Company changes its dividend policy.

 

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy as follows (in thousands)

  

   As of June 30, 2026 
   Total   Level 1   Level 2   Level 3 
Private Placement and Representative Warrants  $1,496   $-   $-   $1,496 

 

   As of June 30, 2025 
   Total   Level 1   Level 2   Level 3 
Private Placement and Representative Warrants  $646   $—   $—   $646 

 

The table below presents the change in the number and fair value of the Private and Representative Warrants since the Merger on June 30, 2026 (in thousands, except the number of shares)

  

   Private Warrants  

Representative

Warrants

   Total 
   Shares   Value   Shares   Value   Shares   Value 
June 30, 2024   4,120,000   $244    50,090   $3    4,170,090   $247 
Exercised   -    -    -    -    -    - 
Classification change from Private to Public   (763,233)   -    (6,750)   -    (769,083)   (454)
Change in value   -    394    -    5    -    853 
June 30, 2025   3,356,767   $638    43,340   $8    3,401,007   $646 
Exercised   -    -    -    -    -    - 
Classification change from Private to Public   -    -    -    -    -    - 
Change in value   -    839    -    11    -    850 
June 30, 2026   3,356,767   $1,477    43,340   $19    3,401,007   $1,496