SYNTEC OPTICS HOLDINGS, INC. Fair Value Disclosure
Note 8 — Fair Value
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2021 and 2022, and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
| Assets: | Level | December 31, 2022 |
December 31, 2021 | |||||||||
| Marketable securities held in Trust Account | 1 | $ | 14,011,070 | $ | 146,626,679 | |||||||
Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers between levels for the year ended December 31, 2022 and the period from May 20, 2021 (inception) through December 31, 2021.
OMNILIT ACQUISITION CORP
NOTES TO FINANCIAL STATEMENT
Level 1 instruments include investments in mutual funds invested in government securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
Warrant Fair Value Measurement
The Company established the initial fair value for the warrants on November 9, 2021, the date of the Company’s Initial Public Offering, using a modified Black-Scholes model for the Public Warrants and Private Placement Warrants and the transaction prices that serve as a proxy for fair value that were observed on the Balance Sheet date. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A common stock and one-half of one Public Warrant) and (ii) the sale of Private Placement Warrants, first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds recorded as a charge to accumulated deficit based on their relative fair values recorded at the initial measurement date. The warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs.
| November 9, 2021 | ||||||||
| Fair Value Measurement | ||||||||
| Input | Public Warrants | Private Placement Warrants | ||||||
| Common stock price | $ | $ | ||||||
| Risk-free interest rate | 1.34 | % | 1.34 | % | ||||
| Expected term in years | 5.87 years | 5.87 years | ||||||
| Expected volatility | 10.0 | % | 10.0 | % | ||||
| Exercise price | $ | $ | ||||||
| Fair Value per warrant | $ | $ | ||||||
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.