Bluejay Diagnostics, Inc. Fair Value Disclosure
4. FAIR VALUE MEASUREMENTS
The assets and liabilities measured at fair value on a recurring basis at December 31, 2021 and 2021 are summarized in the tables below.
| December 31, 2021 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets | ||||||||||||||||
| Cash equivalents - money market funds | $ | 8,795,293 | $ | $ | $ | |||||||||||
| $ | 8,795,293 | $ | $ | $ | ||||||||||||
| December 31, 2020 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative warrant liability | $ | $ | $ | 155,629 | $ | |||||||||||
| $ | $ | $ | 155,629 | $ | ||||||||||||
The table below presents the changes in Level 3 liabilities measured at fair value on a recurring basis.
| Warrant Liability | ||||
| Balance at December 31, 2019 | $ | 96,408 | ||
| Unrealized loss | 42,434 | |||
| Issuance of Series B warrants | 16,787 | |||
| Balance at December 31, 2020 | $ | 155,629 | ||
| Unrealized gain | (9,676 | ) | ||
| Fair value of Series B warrants converted into warrants for common stock | (145,953 | ) | ||
| Balance at December 31, 2021 | $ | |||
Unrealized gain (loss) on revaluation of derivative warrant liability is included in derivative warrant liability gain (loss) in the consolidated statements of operations.
There were no assets or liabilities measured at fair value on a non-recurring basis at December 31, 2021 or 2020.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.