T3 Defense Inc. Fair Value Disclosure
NOTE 13 – FAIR VALUE MEASUREMENT
The following table sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2024:
| Quoted | Significant Other | Significant | ||||||||||||||
| Price in | Observable | Unobservable | Balance at | |||||||||||||
| Active Markets | Inputs | Inputs | September 30, | |||||||||||||
| (Level 1) | (Level 2) | (Level 3) | 2024 | |||||||||||||
| Assets | ||||||||||||||||
| Customer digital currency assets | $ | $ | 615,361 | $ | 615,361 | |||||||||||
| Total assets | $ | $ | 615,361 | $ | $ | 615,361 | ||||||||||
| Liabilities | ||||||||||||||||
| Customer digital currency liabilities | $ | $ | 23,605 | $ | $ | 23,605 | ||||||||||
| Total liabilities | $ | $ | 23,605 | $ | $ | 23,605 | ||||||||||
Customer digital currency assets and liabilities represent the Company’s obligation to safeguard customer digital currencies. Accordingly, the Company has valued the assets and liabilities using quoted market prices for the underlying digital currencies which is based on Level 2 inputs. The Company did not make any transfers into or out of Level 3 of the fair value hierarchy during the years ended September 30, 2024 and 2023.
The Company had no assets or liabilities measured and recorded at fair value on a recurring basis as of September 30, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Feb 10, 2025 | Showing above |
| 2022 | Mar 10, 2023 | |
| 2021 | Mar 31, 2022 | |
| 2020 | Oct 13, 2021 | |
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.