v3.26.3
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Dec. 31, 2025
Fair Value Disclosures [Abstract]    
Fair Value Measurements

Note 8. Fair Value Measurements

 

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of June 30, 2026 and December 31, 2025 (In thousands):

 

   Fair value measured at June 30, 2026 
   Total fair value at
June 30, 2026		   Quoted prices in active markets
(Level 1)		   Significant other observable inputs
(Level 2)		  

Significant unobservable

inputs (Level 3)

 
                 
Assets:                    
Digital assets  $313,378   $313,378   $-   $- 
Liabilities:                    
Conversion feature liability - Convertible Notes   23    -    -    23 
Total  $313,401   $313,378   $-   $23 

 

   Fair value measured at December 31, 2025 
   Total fair value at
December 31, 2025		   Quoted prices in active markets
(Level 1)		  

Significant other

observable inputs
(Level 2)

  

Significant

unobservable

inputs (Level 3)

 
                 
Assets:                    
Digital assets  $441,791   $441,791   $-   $- 
Liabilities:                    
Derivative securities liabilities   428    -    -    428 
Conversion feature liability - Convertible Notes   2,279    -    -    2,279 
Total  $444,497   $441,791   $-   $2,706 

 

 

Conversion Feature Liability - Convertible Notes

 

The conversion feature liability associated with the Company’s Convertible Notes is measured at fair value using a Black-Scholes option pricing model and is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs.

 

The key inputs used in determining the fair value of the conversion feature liability are presented in the table below:

 

   As of
June 30, 2026		   As of
December 31, 2025		 
Strike price  $13.00   $13.00 
Stock price   1.54    3.53 
Volatility (as a percentage)   43.0    45.0 
Remaining term (in years)   0.92    3.00 
Risk-free rate (as a percentage)   3.89    3.49 

 

The following table presents a roll-forward of the Convertible Note Conversion Feature Liability as of June 30, 2026 (In thousands):

 

  

Conversion feature

derivative liability

 
Balance at December 31, 2025  $2,278 
Gain on debt extinguishment   (1,309)
Change in fair value   (946)
Balance at June 30, 2026  $23 

 

Derivative Securities Liabilities

 

As of December 31, 2025, the Company had outstanding Bitcoin put option contracts with a fair value liability of $0.4 million. During the six months ended June 30, 2026, all outstanding Bitcoin put option contracts were exercised, expired, or otherwise settled, and the Company recognized a realized loss of $0.9 million related to these contracts. As of June 30, 2026, the Company had no outstanding derivative securities liabilities.

 

 

Note 11. Fair Value Measurements

 

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of December 31, 2025:

 

 Schedule of Assets and Liabilities Measured at Fair Value

   Fair value measured at December 31, 2025 
  

Total fair value at

December 31, 2025

  

Quoted prices in active markets

(Level 1)

  

Significant other observable inputs

(Level 2)

  

Significant unobservable inputs

(Level 3)

 
                 
Assets:                     
Digital assets  $441,791,316   $441,791,316   $-   $- 
Liabilities:                    
Derivative securities liabilities  $428,236   $-   $-   $428,236 
Conversion feature liability - convertible notes  $2,278,940   $-   $-   $2,278,940 

 

Digital Assets

 

In determining the fair value of its Bitcoin investments, the Company uses quoted prices as determined by utilizing Coinbase closing prices at midnight UTC. As such, the Company’s digital assets were determined to be Level 1 assets.

 

Conversion Feature Liability - Convertible Notes

 

In determining the fair value of Conversion Feature Liability, the Company utilized the Black-Scholes pricing model which is considered to be Level 3 liability. The key inputs are presented in the table below:

 

 Schedule of Key Input Measurement For Fair Value

  

As of

December 5, 2025

(Initial)

  

As of

December 31, 2025

 
Strike price  $13.00   $13.00 
Stock price  $4.36   $3.53 
Volatility   45.0%   45.0%
Remaining term (in years)   3.00    3.00 
Risk-free rate   3.53%   3.49%

 

 

The following table presents a roll-forward of the Convertible Note Conversion Feature Liability for the period from June 17, 2025 (inception) through December 31, 2025

 

 Schedule of Roll Forward Convertible Notes

   Conversion feature 
   liability - convertible notes 
As of June 17, 2025 (inception)  $- 
Initial value at December 5, 2025   4,629,230 
Change in fair value   (2,350,290)
Balance at December 31, 2025  $2,278,940 

 

Derivative Liability - Preferred Units

 

In determining the fair value of the Derivative Liability - Preferred Units, the Company utilized the Black-Scholes pricing model which is considered to be a Level 3 liability. The key inputs are presented in the table below:

 

  

As of

June 23, 2025

(Initial)

 
Strike price - Preferred unit  $11.94 
Stock price  $10.79 
Volatility   47.6%
Remaining term (in years)   0.5 
Risk-free rate   4.29%

 

The following table presents a roll-forward of the Derivative Liability – Preferred Units for the period from June 17, 2025 (inception) through December 31, 2025:

 

 Schedule of Roll Forward Derivatve Liability

   Preferred Units 
   Derivative Liability 
As of June 17, 2025 (inception)  $- 
Initial value as of June 23, 2025   56,298,500 
Settlement of Derivative   (56,298,500)
Balance at December 31, 2025  $- 

 

Derivative Securities Liabilities

 

When quoted market prices are not available, fair value is determined using a market-participant-based option pricing model. The Company utilizes a Black-76 valuation model to determine the fair value of BTC put options leveraging calibrated Bitcoin forward curves and volatility surfaces daily at 4:00 PM ET using executable bid-offer prices and futures data sourced from Deribit. These calibrated inputs are applied across option strikes and maturities to derive fair-market pricing.

 

 

The following table presents a roll-forward of the derivative securities liability for the period from June 17, 2025 (inception) through December 31, 2025:

 

Schedule of Roll Forward Derivative Liability, Put Option

   Fair value 
As of June 17, 2025 (inception)  $- 
Premiums received on sold BTC put options   534,500 
Net change in fair value recognized in earnings   (106,264)
Settlements / expirations   - 
Fair value as of December 31, 2025  $428,236 

 

See Note 3 above for a description of the Company’s accounting policies.